This article compares the long-term results of leadership case studies from four countries (Brazil, England, Denmark, USA). The long-term results are interpreted through the Integral lens, and the leaders compared against 2nd Tier values.

Reference will be made to the Spiral Dynamics Stage perspectives and memes:

Behaviour Type
yellow:	Tolerance of ambiguities, knowledge of assumptions.
green:	Informational, sharing, caring.
orange:	Rational, tasks, expert, efficiency, profit.
blue:	Conforming, unconditional allegiance, tradition, protocol, political / military (mythic).
red:	Power, action, position, predatory, egocentric.
purple:	Feeling, experimenting, impulse, emotion (magic).
beige:	Instinct, pre-egoic, sensation (archaic).

Summary

The influence of each of the case study leaders’ had a powerful phase of influence that ebbed away in all cases over time. The organisations in all cases evolved to distance themselves from the original leaders over time with elements of apparent regression, as if an immune system had kicked in. This appeared at first a negative result from the interviews conducted. However, when using the Integral lens the value of this latter phase could be appreciated as one of ‘Communion’ (the collective embodying the experiences and lessons), in contrast to the leaders’ initial influence being that of ‘Agency’ (defined by differentiation, risk and experimentation).

The case studies all showed a breaking away from Blue-meme power, role and political structures. They had in common a radical stretch to implement pluralistic Green-meme structures. Each of these structures incorporating liberation-management and democratic values, by contrast, gave way to hybrids that returned to having power figures, hierarchical structures, and market meritocracies. The language from developmental psychology applied to collectives appears to resonate with the cyclic changes in these case studies. The organisations reintegrated previous perspectives to rediscover their unique strengths, having overcome past pathologies.

The case studies are ‘stories’ of progressive leadership in their own unique way, and show how the leaders’ influence evolved over a period of 10 years or more. Often business case studies articles focus on a particular chapter of a company, a defining change or dilemma. In the recounting of these four case studies, a longitudinal view is taken of the formal leaders’ influence chronicled over many years. This approach therefore leans more towards that of ‘business history’, rather than one that identifies the profile of the ultimate Integral leader. It is recognized that there are hundreds of possible equivalent case studies demonstrating similar journeys and values (e.g. as diverse as W L Gore, Southwest Airlines, Grameen Bank).

The research project into the case studies began in 2001, initially identifying from existing published material (HBR, Fast Company articles, books and PhD papers) common traits of peer-based management and democratic practices. However, as the direct interviews with the leaders and the executive management at these companies progressed, the initial theoretical fabric fell away – there were too many contractions, contextual dependencies and apparent regressions, for the initial thesis of a link between organisational values and business performance to hold up. Each of the themes of interest, such as democracy, were found to be held by their opposite – for example, in one of the case studies (Semco) as much as it portrays itself as a radically democratic company, it is also operates a meritocratic sink-or-swim environment of autonomous survival.

Faced with this dilemma of contextual dependencies, it was through learning of the Integral lens, that a new constructive interpretation of the data could be made. The Integral lens had the unique capacity to bring a context-aware language to the diverse manifestations of leadership and the twists in their journey over time.

The Author’s Perspective

As a precursor, the evolution of the author’s perspectives is worth presenting to help frame the origin of the interview and research work.

Early on in a career in aerospace, I read E. F. Schumacher’s Small is Beautiful, and was struck by its holistic approach to macro and micro-economics. I decided to change career direction and focused on getting a job at the overseas development organisation that Schumacher founded in the 60s (Intermediate Technology). I succeeded in working there for four years. In many ways, the message from Small is Beautiful is a developmental one – matching agricultural and production technology with the community’s capabilities, rather than exporting unsustainable foreign technology. It was only two years ago that I realised that Schumacher also wrote of the same Integral Quadrants as Ken Wilber does, in his book A Guide for the Perplexed, published in 1977.

After completing an MBA in France, I was inspired by a series of “radical” case studies that had implemented unusually loose structures and explicitly democratic principles. By identifying the performance results and theoretical fabric that would connect these case studies, I felt I could show that there was directionality in the way organisational design is evolving – combining better performance with higher values.

My own experience of 10 years in industry had left me frustrated at what appeared to be systemic inefficiencies and conflicts in the perspectives throughout the layers of the organisations I had worked in. It did not seem to me that the MBA had got to the sweet spot of the core influencing factors behind strategy – namely business psychology and organisational design. In a lecture on strategy we were once shown a video of a speed house-building competition in the USA that led to the world record for the time to build a family house (in under four hours). But I protested, surely this is looking purely at process, and not dealing with any of the uncertainties of business?

Two quotes from the case studies provided the bait: Ricardo Semler (Semco) – “Semco works in practice, but I am not sure if it would work in theory” – and by Andy Law (St. Luke’s) – “Those things that have benefited us the most have been least understood by us”.

Introducing the Case Studies

The case studies are Semco, Brazil; Oticon, Denmark; Visa International, USA and St. Luke’s, England. Each was founded (in the case of St. Luke’s and Visa) or re-founded (in the cases of Semco and Oticon). Allowing all individuals to decide which projects to work on, who they choose to work for, and for all levels of employees to take decisions affecting the future of the company, are some of the defining characteristics in the choice of the case studies. The case studies also represent ownership models across the spectrum; St. Luke’s as a co-operative, Semco privately-owned, Oticon publicly quoted, and Visa as a partnership.

Each of the companies have approached their working culture as ‘experiments’, and so there are valuable conclusions from the long-term performance of policies. Practices such as total open book management (no document in the company being confidential), no job titles, internal market places, self-nominated salaries etc., are frequently seen to open the doors to chaos. However the employees in the majority of cases stepped up to embrace the extra level of responsibility.

And they wanted to go further than common rhetoric: This is not ‘empowerment’ as Andy Law (St. Luke’s) says in his Open Minds book; “’empowerment’ has the connotation of power graciously given from authority to others, with the unstated message that it may be removed again at some future date”. St. Luke’s was to embed empowerment as a fundamental part of its structure.

Semco

Semco is known for turning business conventions on their head, and for giving its workers an exceptional say in the way the business is run. The workers set their own salaries and productivity targets, and recruit their managers.

In 1982 at the age of 24, Ricardo Semler took control of Semler and Company, based in Sao Paolo, a business founded and managed by his father. The company’s organizational structure was a traditional role-based hierarchy led by an autocratic leader.

Semler and Company, founded in the 1950s, manufactured pumps, centrifuges, high volume dishwashers, air conditioners and heavy industrial components. On his first day as the new CEO, Ricardo Semler fired two-thirds of the top management of Semler & Company, many close friends of his father, and began plotting a product diversification strategy for the newly renamed Semco.

In the last two decades, Semco, has operated as a real-world laboratory for Semler’s radical approach to leadership. For the most part, the Semco experiment has been a huge success. Its success can be seen in the numbers: Employee growth from 300 in the 1980s to 3000 today, and turnover from $4m in 1980, to $1bn in 2007. “If you look at Semco’s numbers, we’ve grown 27.5 percent a year for 14 years,” says Semler. This is a rare record of performance for a Brazilian company, surviving through the vagaries of the Brazilian economy.

There are no organization charts, no five-year plans, no corporate values statement, no dress code, and no written rules or policy statements beyond a brief “Survival Manual,” in comic-book form, that introduces new hires to Semco’s unusual ways. The employees elect the corporate leadership and initiate most of Semco’s moves into new businesses and out of old ones. Of the 3,000 votes at the company, Ricardo Semler has just one.

Semco has grown through various structural designs, from hierarchical to matrix, to business units to lattice and spin-off satellite companies. Each shift and experimentation had inherent transition pains, with employee losses and new issues to solve.

Ricardo Semler, in writing Maverick! (Century, London, 1993, over 1m copies sold), is one of the rare practicing executives that has published a top-selling management book. A typical quote from Semler is: “Our ‘architecture’ is really the sum of all the conventional business practices we avoid.”

Ricardo Semler, after over 20 years heading Semco, has now reduced his involvement in the company, handing over to a new generation of managers. Semler is now witnessing a certain dilution of his values and vision, in the hands of the new management – such as the benefits of multiple bottom-lines and avoiding growth as a sacred objective.

St. Luke’s

St. Luke’s was born out of the London office of the renowned US Chiat/Day advertising agency. The agency had a well known reputation for eccentricity and risk-taking. In 1995, when Chiat/Day was sold to TBWA, Andy Law led his colleagues to mutiny, and succeeded in a management buyout deal. He had bought himself an ad agency, and within a matter of weeks, he gave it away in creating a fully employee-owned co-operative.

The company that Andy Law defined in the reinvention of this office, was that of people wanting to join a ‘movement’ in pioneering something new. An experiment in collaborative business was born. Essentially, St. Luke’s realized that it was necessary to challenge the very assumptions about what it meant to “do business”, and to see that nowhere are there any rules about how business should be conducted. St Luke’s was therefore founded on a fundamental belief of a connection between co-ownership, creativity, collaboration and competitive advantage.

St Luke’s decided to try a number of things that served to continually challenge everyone in the company to stay fresh, destabilising the workplace and avoiding habits. For starters, they decided there would be no desks, no job descriptions and employees (or co-owners) were encouraged to work outside their remit. Staff could also define their own learning needs and targets and were entitled to a four-week sabbatical every five years as well as being allocated 50 hours off each year to pursue a ‘social project’.

There were no outside shareholders and no bonuses. Because of the co-ownership structure, people knew they were able to take more risks without loosing their position in the company.

Andy Law : “The reason my approach at St. Luke’s got so much airplay was that the market pushes back on innovation. It tries to normalise businesses. Accounting laws force companies into rigid structures (partnerships, limited liability partnerships, limited companies etc.). That is the root cause why every company ends up being the same.”

The economic timeline for St. Luke’s needs to take into consideration the time it was the Chiat/Day London office, slowly building its reputation and relationships. Starting in 1990 from scratch, the business took 5 years to gain momentum. Throughout this first phase, the team remained under 30 people.

Then, in 1997, its second full year of business as St. Luke’s, the business took off, and they billed over £70m of work. It made all the headlines winning Agency of the Year, while only growing to 100 employee-owners. At its peak, in 2002 there were 160 employees worldwide.

Initially St. Luke’s benefited from a factor of fashionability. It had captured the Zeitgeist of the late 90s, with the emergence of Tony Blair’s New Labour messages of ‘shareholder value’, pro-Europe, and a reaction against Tory values.

But in 2000, key creative managers began to leave the company, frustrated by the flat structure and democratic processes. The company began to be burdened with a legacy of internal expectations from past success. The market had shifted from beneath them, and gaps in St. Luke’s’ specialist capabilities began to appear. The consensus decision process was not geared to force through the shake-ups required.

Andy Law tried to keep the company on its toes, by proposing more international expansion. He met with resistance, and saw straight away a change in the perception of risk by the co-owners. With their now-significant share value, the co-owners resisted change.

Andy Law left St. Luke’s in 2003 after he felt an insurmountable gap in the behaviour of the collective decision making, and his own reading of which strategy was necessary to turn the company around. In 2005 the Board took control to reduce worker numbers dramatically to 50 and reduce expenditures. The share allocation system was changed, to become a more progressive process of allocation over time, and on performance. Annual turnover is currently in the region of £10m.

Oticon

In the beginning of the 1990s, Oticon became famous for its radical internal hybrid, the ”spaghetti organization.” It has been the subject of dozens of articles, academic research papers, and visited by armies of corporate managers to have an insight into the process.

Founded in 1904 and the market leader in hearing aid products in 1974, Oticon began to loose their dominance in a continuous slide over the following seven years. In 1987 the equity value of the company had dropped by 50% and that they had made an 11% negative return on sales. The bank forced the Board to find somebody that could turn the company around, and shake up its governance structures, which lacked external accountability.

Enter Lars Kolind, a previously successful CTO, now recruited by the Board to turn the company around. Having taken total control of all expenditures, Lars diagnosed a rigid role-based and political organisational structure. Previous product innovations were revealed to have been suppressed by individuals wanting to protect their positions of power.

The major changes then began in 1991, when Lars officially put into place the ‘Spaghetti Manifesto’. Lars wanted to build from the bottom-up a brand new organisation, through a process of dis-organisation.

The manifesto substituted the fixed job descriptions with mechanisms that would allow the individual to form their own job and allowing them to use a wider spectrum of competencies in addressing a wider range of tasks, evaluated by each individual. With a completely free flow of information, the conventional structures were substituted with the three natural emerging structures, of project teams, specialists and process-support teams.

The physical environment was to have no barriers, with the boss in with their teams. Freedom in where to work allowed colleagues to be close to whoever they need to be close to, for that task or project. Value and vision driven management replaced the previous command and control environment.

The spaghetti organization was a radical attempt to foster dynamic capabilities by imposing loose coupling on the organization. Infusing hierarchies with elements of market control, and creating a ‘hybrid’ structure, simultaneously increased entrepreneurialism and motivation.

By 1994, the turnaround had been achieved, from near-bankruptcy to 22% return on sales, and 15% annual growth rate. It was back in contention as the World leader in hearing care products and services.

An organizational economics interpretation of the new Oticon, showed that a strong liability of the spaghetti organization lay in how employees were incentivised. Such “internal hybrids” are inherently hard to successfully design and implement, because of fundamental credibility problems related to managerial promises to not intervene in delegated decision-making. This problem is often referred to as the “problem of selective intervention”, distorting the market place incentives.”

Niels Jacobsen joined in January 1992 as Executive Vice President, focusing on costs and revenue generation. He became Kolind’s closest management colleague. It was no secret that their personalities were very different. Kolind: “I chose a person that was my direct opposite. I was the marketing guy, inspirational, aggressive, extrovert, outspoken. I chose one that was down to earth, number cruncher, and the two of us worked extremely well together and every time I got ideas that were too wild, he always helped me. It takes a lot of self-confidence to choose somebody that really will challenge you. And he challenged me every day on everything, you know, and gave me such a hard time and I think that was exactly what I needed.”

Changing the organizational structure was then seen as important to solving the motivational problems and ambiguities of the spaghetti model. About a decade after their implementation, the spaghetti organization had grown into a more structured matrix organization.

After 4 years of productive partnership, in 1996, different visions for Oticon’s strategy emerged between Kolind and Jacobsen. Jacobsen favoured greater diversification in the product range, and Kolind in greater specialisation. Kolind’s felt this divergence of vision as a fundamental challenge to his future at Oticon – his phase of leadership was coming to a close. Kolind, towards the end with his reputation as a visionary person, lost a certain consistency and was not seen to be so close to the facts of the business reality. After Kolind’s decision to leave, to his surprise, 98% of the Board chose Jacobsen as his successor.

When Kolind left Oticon in December of 1997, with a very strong personal imprint on the structure, Jacobsen did not make any immediate changes. This made for a smooth transition— the structure and culture appeared to have enough momentum not to need any major changes.

Kolind: “It’s been somewhat of a surprise to me that even under a person that is my exact opposite, this seems to work very well.”

Under Jacobsen, Oticon experienced strong growth, and introduced a matrix organisation structure along with a diversification of its product range. By 2005, it sold three times as many products as it did in 1998, had grown from 150 people to 400 at the HQ office, and was the 2nd largest market player behind Siemens.

Interestingly enough, the difference in strategy preferences between Lars Kolind and Niels Jacobsen (high-end product strategy vs. volume market strategy), turned out to be based on a converging issue, that would evolve. The niche that Oticon has carved out for itself since is in applying mass production techniques to high end products.

Only 10% of the current personnel were in Oticon at the time of the radical changes, 10 years ago. Growing from 150 people 10 years ago, to 500 people today has brought them to introduce innovative methods of planning resources and projects, where all the information on targets and resources between managers is pooled and negotiated.

With this growth, the employees seek consistency in the management and have expressed discomfort with too much freedom. The highly specialised nature of the workers mean that they cannot move around and change jobs to the extent that was experimented with in the times of Kolind. An interesting matrix of Competency Managers, creates a continuity of management across projects for each employee, even though the employee will first identify him/herself with the project.

As expressed by the current HR Director at Oticon, the experimentation process at the time was something that was proven to be successful in setting Oticon onto a new track – it is just that those policies were appropriate in that context, and do not apply universally for all stages of a company’s growth.

Visa International

The Visa case study is predominantly one of fostering collaboration between market players. Its founder, Dee Hock, championed a universal message of the possibilities when diverse groups of organisations or people build trust, collaborate, and agree to make mutual concessions for the sake of a higher goal.

In the late 1960s the US credit card industry was nearing collapse due to its rapid expansion and unregulated distribution of cards, in the race between competitors for market share. Fraud became rampant and the clearing system began hemorrhaging. To stem this self-destruction, the Bank of America convened a meeting between licensees. Differences flared however, and participants appeared locked in conflict. Dee Hock, a regional licensee, stepped forward to propose a committee to systematically study and solve the problem. Dee’s mission in fostering collaboration began.

In 1968, after nearly two years of building consensus, Dee Hock convinced Bank of America to give up ownership and control of their BankAmericard credit card program. Control passed to a new, independent entity called National BankAmericard Inc., made up of the various card issuer banks. Hock designed the organization according to his philosophy: highly decentralized and highly collaborative. Renamed Visa International in 1976, it is a non-stock membership corporation equally owned by its member banks.

As a private business association, Visa now handles 10% of the World’s money transfers—its electronic systems clear more transactions in one week than the US Federal Reserve System does in a year. Made up of four non-stock, separately incorporated companies, it has a staff of about six thousand people in twenty-one offices in thirteen countries.

Visa International, from its unique inception in creating a platform of collaboration and trust between competing banks, grew as a self-managing, adaptive system, with no hierarchy, limited structure and no job titles. Made up by a group of interdependent business leaders and organizations, it functioned in shared self-interest around an operating constitution and a commitment to consensus and innovation.

Visa’s success was the driving force behind Dee Hock’s writing of two books: Birth of the Chaordic Age, 1999, and One From Many: VISA and the Rise of the Chaordic Organization 2005.

As Visa matured, it developed operational strengths in dealing with the logistics and information systems. Strategically it had a culture of playing its cards close to its chest, but became more transparent as it built partnerships and extended its portfolio of services. Whilst not notable in the way that its day-to-day operations are structured from a human resources point of view, the founding principles of Visa remain key. With a decentralized policy, it allows members to adapt the Visa International rules and products to suit the individual needs of their regional members. Regional banks therefore have a strong stake in the governance of their region.

How To Collectively Analyse the Case Studies? Casting The Developmental Lens

The ambiguities in the research data among the case studies, shows that there was no single organisational design structural answer. The case studies are suitably varied to show a broad range of experiments with structure. Oticon and St. Luke’s experimented with an internal market hybrid approach, and Semco with an external market hybrid (spinning off satellite companies and having 50% of workers as contractors).

A clue in how the variety of structures and phases seen in the case studies could be associated to each other came from developmental psychology. Each Stage has its unique strength for various functions of the company (red in sales, blue in autonomous teams, orange in technical departments, green in HR,), or various phases in the lifecycle of the organisation (start-up, rescue/turnaround, integration/consolidation).

The case studies therefore provide an opportunity to use the developmental psychology ‘Stages’ as descriptors, applied to collectives. Manifestations from all Stages are present in the case studies, and for that matter in any social holon. The emphasis between Stages appears to vary according to many factors, such as the specific department, phase, and circumstantial challenge being faced.

Escaping the Pathologies

Semco and Oticon are clear examples of breakaways from inherited Blue-meme bureaucratic structures. Whilst Visa and St. Luke’s demonstrated new-creation structures, both the banking and advertising sectors’ traditional cultures can be said to be heavily Blue-meme based. Both Andy Law and Dee Hock were consciously looking to push away from the cultures they had previously experienced.

The compelling aspects of these stories of escaping from the ‘old’ is what defines the roles of each of these leaders. They had a very clear idea of the pathologies of the Worldview of the traditional cultures, and were willing to define a new approach.

The Radical Policies Tested Over Time

Despite their powerfully liberating initial impact, over time the limitations of many of the radical policies emerged. For example, the internal market place in Oticon for project ideas, was overseen by a committee that gradually brought in subjective judgements, distorting the true free market life-cycles of the ideas. St. Luke’s re-introduced hierarchy into the co-owner committee decision process. At Semco, an initiative called ‘C’ Ta Loko?’ (‘Are You Crazy?’), where people are freely invited to come to voice issues without inhibition—the context is to provoke reactions such as ‘are you crazy?’—have served their purpose in time, but have not lasted forever.

Visa, whilst representing a unique achievement in collaboration, clearly settled into an organisation of operational expertise, where radical ambitions for creating new social structures had less relevance. The priorities were to be naturally driven by its partners—the international banks.

St. Luke’s experienced a distinct shift in the perspectives of its co-owners. At the beginning they had nothing to lose and took risks in their creative work and in building their image. Once the success came in, 3 years later, the co-owners’ whole attitude toward risk changed. They began to realise that their shares were beginning to be worth a significant amount of money. The company was, therefore, being run by shareholders whose real desire was to put their assets into low-risk ventures only.

The Signs of 2nd Tier Leaders

The leaders all give clues to their Worldviews representing that of 2nd Tier. Lars Kolind was willing to have a challenging co-Director, whose outlook and style strongly contrasted his. Ricardo Semler immediately saw the value in bringing in a progressive educationalist (with no corporate experience) as HR Director at Semco. Andy Law was educated in the classics, and led profound self-questioning discussions at St. Luke’s. Dee Hock, in creating the first allegiances between the international banks, adapted his personal style from nurturing to bargaining to visioning, when dealing with mistrust and threats from the partners.

The corporate anti-hero character can be seen in all the leaders. Ricardo Semler in delegating all responsibility while on vacation, took it as a matter of pride that on two occasions he returned to find his office had been moved – both times getting smaller. Lars Kolind ceremoniously uprooted the reserved CEO parking sign, and put it into the trunk of his car (he drove a family station wagon, rather than taking the company Jaguar option). Andy Law shunned any financial ambition to distribute shares to all employees. Dee Hock adopted a low-profile CEO strategy, and rejected the label as the system’s ‘essential man’. “Utter nonsense,” Hock says. “It’s the organizational concepts and ideas that were essential. I merely came to symbolize them”.

Reflecting on the underlying influences on organisational behaviour characterised the leaders’ perspectives. A conclusion from Ricardo Semler is that all the inefficiencies in our default corporate behaviour originates from our education – we are put into a command and control environment in our earliest formative years and we carry this through to our professional lives. Semler goes further to challenge the notion of leadership: “I think the idea is outdated that leadership is only relegated to a few and that it can be planned, structured and developed. The whole idea of leaders implies that only a few are capable of pointing us in the right direction. I’m more interested in the structures or the architecture of organizations that enable the company to survive in the future, independent of the leaders.”

The 2nd Tier Style – becoming outsiders

The disruptive and challenging styles of the leaders has often got to a point of stimulating a defensive reaction from the Directors in the case study companies. This conflict is an example of where 2nd Tier leaders run into situations where they become the natural outsiders to the central running responsibilities.

Ricardo Semler has on numerous occasions proposed a temporary suspension of internal emails, to force people to talk face to face. He has been constantly outvoted by his Directors.

Andy Law comments on when he began to realise that the co-operative structure at St. Luke’s began to behave like a mutual fund: “The first time that I began to worry about this, I put a big illuminated sign in the reception area, saying “A ship is safe in the harbour, but that is not what ships are made for”. Bearing in mind that this is the company that I philosophically and morally led, and I gave the company to the employees, everyone felt that we are very successful and became happy with the situation. But that is not why I gave the company to the employees – I didn’t give the company to be thanked. That for me is an absolutely classic mistake. The advice I had from Anita Roddick et al. was “make sure you can still lead the company”.

Leadership in the Context of Each Stage

But can Ricardo Semler’s quote be applied universally? A crucial clarification is to understand the type of leadership Semler is talking about, and at what level it is operating at. He has in fact devolved leadership down to the autonomous team and business-unit level. Operational leadership is promoted at the optimum point of knowledge. He himself is delivering a very powerful leadership message through his framing of how other managers run the company, of which he is still the majority owner.

The Common Disappointment of the Leaders

The leaders have all moved on to a variety of other activities, still pursuing their original values and visions in educational, community, consulting and communication projects.

Lars Kolind has successfully taken his ‘spaghetti organisational model’ to other corporations in Non-Executive Director roles, and is now involved in government research, start-up funding and consulting work. Ricardo Semler has gone on to set up kindergartens in Brazil based on the Steiner and Waldorf educational models. Dee Hock founded the Chaordic Commons to promote new models of collaborative organisational designs.

However, the leaders of these case studies lament the lack of adoption of their management styles. They feel that management and owners still cannot let go of control, despite evidence that performance will improve. They feel they have proven what is possible when changing the collectives mode of discourse and sense of meaning.

Lars Kolind: “I’m happy to say that I am developing other case stories, from what I’ve been doing, but I’m struck with the fact that it is the case story that counts. It strikes me that the Oticon case, although it happened almost 15 years ago, is a very, very powerful vehicle of communicating the principle.

“What frustrates me is that there are so few that have gone the whole way to a spaghetti structure. There are many that have gone part of the way and been inspired and I have had hundreds of letters. So I can’t say it hasn’t had an effect, but I am just frustrated that they are probably harvesting 10% or 20% of the effect, and you can imagine what they could do if they really did it.

“If you look at Nokia, you’ll see the way they’ve organised themselves and then disorganised themselves. Nokia had eight groups visiting Oticon in those early days, and there’s a clear line from what Oticon was doing, to what they are doing.”

At Semco, nearly 2000 executives from around the world have trekked to Sao Paulo, to study Semco’s operations over the past 15 years, to the point where Semco had to refuse visitors. The workers were beginning to feel as if they were exotic animals in a zoo. Despite these visits, few have tried to emulate them.

Hock became discouraged at Visa, despite the company’s success, and left in 1984. He felt that it had only implemented 25% of his vision of a chaordic organisation. Hock began a life on a remote farm away from the corporate World.

But how could Dee Hock, with such credibility, become disillusioned in transmitting his message? Hock founded the Chaordic Alliance and collaborated with the Santa Fe Institute. The Chaordic Alliance later changed its name to Chaordic Commons, and, in mid-2005, Dee Hock broke all ties with the organization.

This is where a developmental perspective helps inform our interpretation of the territory. The leaders have not expressed their efforts in influencing management practices in terms of both translational (harnessing the benefits of each Stage) and transformational (increasing perspective) changes.

Kolind: “After I left Oticon I worked on a book that was published in 2000, in Danish called The Knowledge Society, it became a national best seller. I got hundreds and hundreds of speaking offers. And I got to speak about The Knowledge Society and I didn’t really focus on Oticon. Everybody was happy with the speech, but 98% of the questions were about Oticon and case study. All the time they come back to how was that? What did you feel? What did you do? What did they say? Everybody wants to hear about the case. Nobody wants to hear what I’ve learned since then!”

Agency and Structure

The direct influence of each of the leaders can be recognized as being significant on their organisations. Through the research, it has become apparent to what extent their indirect influence has infiltrated Directors around the World.

In terms of the cyclic relationship of agency and communion, the extent to which the leaders in the case studies have stood out in ‘agency’, should be contrasted to the environment of their social norms. This ‘agency’ is naturally then a temporary force, with over time elements of the new to be integrated into the wider social conscience. The agentic risk, taken by the leaders, shows how it is possible to transcend, yet include, the spectrum of management practices.

This shows the extent to which integration into the wider community and social norms is the ultimate test of the success of the efforts of these leaders.

Integral Interpretations: Quadrants

The Integral lens, with interpretations unique to this research project, follow below, to begin to make subtle but important distinctions that tease potential confusions apart, and best calibrate our assumptions around the observation of the journeys of the leaders.

To begin the interpretation of the case studies, the Quadrant lens, as described by Ken Wilber and E. F. Schumacher, provide a useful orientation tool around the various organisational design theories and analytical approaches.

The merits of a phenomenological research (observing patterns) versus a behavioural approach (looking at cause and effect) have been discussed in organisation behaviour literature. It is when we associate these approaches to the Quadrants that it is possible to see where they can each apply (Figure 1).

As another distinction, by looking at the spectrum of observed Human Resource policies it is possible to see the terms on which the subject (the employee) is taken. Policies will reflect the level of trust that the employee is held in. Rules and regulations will assume a passive subject, whilst incentives will call upon the employees’ to make decisions for a higher goal. It is well known how the ‘paradox of consequences’ manifests itself, where rules unintentionally remove responsibility from the subject, to therefore reinforce the need for more rules. Striking the right balance can be assisted in associating the two perspectives to the Quadrants (Figure 2).

Further distinctions that help manage expectations of understanding and analysing the cases studies, can be found in Figures 3 and 4.

In particular, there is the question as to whether by capturing the trends in organisational design it would be possible to see converging trends. This can be framed in the context of the external, explicit structures, versus the styles, meanings, symbols, stories, implicit meanings, language and beliefs of any collective. Here we can naturally expect to see both Divergent and Convergent trends (Figure 4).

Figure 4. Solutions

A first benefit of making the distinction between the Internal and External perspective of the Integral lens, is that it becomes natural to expect certain results from the case studies to be divergent. Where it can be possible to find convergent trends from the results or these organisational experiments, is then in the explicit External-Collective Quadrant. The manifestations of higher-Stage levels in the External Collective can be recognised; autonomous teams, distributed business units and market hybrid structures. This is where partial structural conclusions can be made. These can be further clarified with their characterisations at each Stage. Then, separating out the styles, symbols and rituals of each organisation (in associating with the Internal-Collective dimension), helps in understanding their natural diversity.

For the process of comparing the case studies, the distinctions described in the above figures help ‘calibrate’ the observer. For example, in firstly setting expectations as to what aspects can be compared. Whilst certain aspects of the stories, symbols and meanings embedded in each of the case studies can be associated, because these aspects are seen through the Internal perspectives (left hand Quadrants), they will be naturally divergent.

Before the observer takes fear in the fact that nothing is absolute (it is all divergence), reassurance can be taken from the fact that structural answers to organisational design (centralisation vs decentralisation) can still be identified – just as long as they are held in the view of all Quadrants. That is, held together with the dialogical, internalisation process side of the Internal perspective. Holding the two Internal/External perspectives together is then a dynamic, an exchange between the two.

On Collectives:

A quote from Robert May (joint professor University of Oxford and Imperial Collage London): “The significant breakthrough we really need is better understanding of human institutions, particularly of the impediments to collective, cooperative activity in which all individuals pay small costs to reap large group benefits. Darwin recognized the evolution of cooperative behaviour as one of the most important unsolved problems of his day. We have made relatively little progress since then. Perhaps the social scientists of 2056 will have succeeded in combining the rigour of the ‘hard’ (that is, easy) sciences with the thoughtful introspection of the humanities to solve this problem.”

Below is an approximate association of Stage characteristics to various dimensions of organisations (point in its lifecycle, sector, department, ownership). The colour scheme relates to the developmental Stage, as described in Spiral Dynamics (ref. Table 1.). The table is therefore an application of the Stage characteristics at a ‘meso’ level, as compared to micro-individual Stages, or macro socio-economic Stages. At this meso level, one can appreciate the strengths and appropriateness of each characteristic according to specific situations. This exercise in associating the Stages to organisations, is purely to show how characteristics may have tendencies to cluster.

Behaviour Type	Lifecycle	Type	Sector	Department	Typical Ownership Model
Tolerance of ambiguities, knowledge of assumptions.	Adaptation, rebuilding, Amending	Flexible Agents, Lattice of Business Units	Consulting	Agents,Autonomous Teams	Hybrid
Informational, sharing, caring.	Maturation, consolidation of success	Consensus	Care/health, Education, Charities	HR	Co-operative
Rational, tasks, expert, efficiency, profit.	Scales of Economy, Expansion.	Task, Market, Matrix	Finance, industrial, multi-national	Accounts	Public-quoted, external investors
Conforming, unconditional allegiance, tradition, protocol, political / military (mythic).	Formalisation of Identity, incorporation	Hierarchy, Power, Bureaucracy, Military	Architects, Legal	Production	Partnership
Power, action, position, predatory, egocentric.	Start-up	Adhocracy, Atomistic	Franchises	Sales, Creative	Sole Owner
Feeling, experimenting, impulse, emotion (magic).	Entrepreneur, Formation	Clan, Role	Family Business	Customer Support Dept.	Independent
Instinct, pre-egoic, sensation (archaic).	Individual		Dance, Art, Theatre

For each case study, the above colour associations can be used to describe their journeys. Semco can be said to have had originally a centre of gravity that was Blue (a hierarchical, role and political structure), that then integrated features of Orange (a hybrid of business units) and Green (freedom of information, equal opportunities). The satellite spin-off companies of Semco then re-integrated aspects of Red and Blue for survival and bonding of new teams. St Luke’s defined its structure heavily on Green values (equality of all workers), rejecting any hint of Orange meritocratic language – to only find itself forced in the end to implement rational cuts. Oticon, in moving away from Blue, was strongly influenced by Green values when implementing its Orange-related meritocratic internal market system – in the end provoking Blue political interventionist events that distorted the market. Oticon’s interpretation of Orange in its structural design is now more process and expertise-based. Visa, on an inter-organisational level has characteristics of Yellow.

Conclusions:

In contrast to the leaders’ almost evangelical presentation of the benefits of a radical redesign of social systems, the developmental stage language provides a clearer understanding of why the case studies appear to reintegrate more conservative operational practices.

Radical policies mature, through a cycle of agency and communion, with the important progression away from past pathologies (e.g. bureaucratic cultures, dominant power-figures). The common factor is the extent to which the past radical policies for which the companies became well known, have been toned down. As João Vendramim of Semco remarked, these policies were not designed to last permanently.

The radical leaders (Dee Hock, Ricardo Semler, Andy Law, Lars Kolind) had adaptive methods of influencing the organisations. They each entered the stage imposing themselves with initial authoritative control or a defining vision, to then frame the rules of the structure. They later minimised their interventions, to ensure the organisation did not depend on them.

As if the company develops an immune system that eventually rejects the original radical, many differences between the organisation and the leader emerged over time. Crediting the leaders with 2nd-Tier type skills, they rarely fought to impose themselves again, to tackle or realign these differences. In the majority of cases, they accepted those differences, recognising already the extent to which already they had influenced the organisation.

The long-term results show the merits of balanced mechanisms of ownership. Semco combines democratic policies with meritocratic performance driven incentives. Both St. Luke’s and Oticon have reinstated structures of job-roles and departments. St. Luke’s has re-calibrated its co-operative ownership rules to only progressively issue shares. Oticon’s employees have been explicitly calling for procedures to be defined, as they grow to nearly 500 personnel at the Copenhagen HQ.

Developmental psychology can provide an insight into the reasons for the frustrations of the radical leaders in spreading their vision. Their 2nd-Tier messages are only being self-selectively being heard by those who are developmentally able to understand them. The leaders, if anything would be able to set their expectations, as to where their message is likely to have the most effect.

John Oliver has worked for 8 years in technology sales management (USA and France) and 2 years in telecoms strategy and market research consulting.  On completing his engineering degree in London, he worked for Intermediate Technology Consultants (founded by E.F. Schumacher) for 4 years in technology transfer projects to Nepal and Ghana.  He completed an MBA (with honours) in 2000, at Theseus-EDHEC, France. John launched Emotion-Economics in January 2008, applying developmental metrics to management assessment for the due diligence process of investors and VCs. A international survey report of 40 international VCs will be available in June 2008, on current management assessment practices.