Evolutionary Leadership and Cultural Capital

Organisations striving to be successful in the 21st century will have to know how to transform every job into a mission. They will have to significantly flatten their structures by transferring decision-making powers to their lower levels, and above all give the responsibility to think back to employees.

 

In order for organisations to survive and be successful, many managers and leaders will have to forget what they have learned about managing organisations. They must develop a new business paradigm – one based on creating for the common good and not on fulfilling individuals’ personal interests.

 

Cultural Capital as a New Competitive Advantage

Formal education has lost a lot of importance in organisations for the 21st century, while emotional intelligence is becoming extremely more valuable. The majority of innovations will be proposed by employees and not specialized departments or leaders. The role of the leaders will be above all providing an environment that boosts creativity.

This is how Richard Barret, the founder and chairman of the Barret Values Centre, describes his philosophy in articles and books. To help organisations and communities survive and thrive, Barrett dedicated his life to the transformation of organisations and broader society, and to helping them evolve to a higher level and ensure their sustainability and wellbeing. He had proven that cultural capital has become organisations new competitive advantage. He also created the seven levels of consciousness model for individuals and groups, which shows how maturity or level of development affects the performance of individuals or the organisations that they are leading.

 

The Seven Levels of Consciousness Model

The seven levels of consciousness make up a model for measuring the values of individuals, groups or organisations. It shows at which level of development an individual or group is, and the needs that the individual or the group wants to fulfil. Motivation and values come from needs. The model shows what is important to individuals or organisations at different levels of development.

 

All groups of people grow and their consciousness evolves over seven defined levels. Each level focuses on specific needs. These needs are the basic motivational force for people.

  Level of consciousness Motivation Values
7 Service Social responsibility: working together with other organisations and stakeholders towards the social goals of increasing the sustainability of humanity and environment, while at the same time improving the organisation’s internal cohesion through compassion, humility and forgiveness. Service to humanity and the planet, social responsibility, future generations, long-term perspective, ethics, compassion, humility
6 Making a Difference Strategic alliances and partnerships: building mutually beneficial links with other organisations and the local community to address social and environmental challenges. Strategic alliances and partnerships, environmental awareness, community involvement, employee fulfilment, coaching/mentoring
5 Internal Cohesion Mobilizing employees through shared mission, values and vision that foster commitment and integrity, and generate enthusiasm, creativity, and passion. Building internal community, shared vision and values, commitment, integrity, trust, passion, creativity, openness, transparency
4 Transformation Adaptability and continuous learning: including employees in decision-making and making them responsible for their success in an environment that encourages innovation, constant progress, knowledge sharing, and the personal growth and development of all employees. Continuous renewal and learning, accountability, adaptability, empowerment, teamwork, goal orientation, personal growth
3 Self-esteem High-performance processes and systems: creating pride among employees through policies, procedures, systems and processes that establish order and enhance organisations’ performance by integrating best practices.

Focus on reducing bureaucracy, hierarchy, silo-mentality, power and status seeking, confusion, complacency, and arrogance.

High performance, systems, processes, quality, best practices, pride in performance

Bureaucracy, complacency, confusion, arrogance

2 Relationships Relationships that support the organisation: building harmonious relationships that instil a sense of belonging among employees, and a sense of caring and connection between the organisation and its customers.

Focus on reducing internal rivalry, manipulation, blame, internal political games, ethnic and gender discrimination.

Harmonious relationships, loyalty, customer satisfaction, friendship

Manipulation, blame, internal rivalry, discrimination

1 Survival Focus on the profit and shareholder value: creating a financially stable environment, and focusing on the health and safety of employees.

Focus on reducing excessive control and caution, short-term focus, corruption, greed, and exploitation.

Financial stability, shareholder value, organisational growth, employee health and safety

Greed, control, corruption, exploitation

 

While the model itself focuses on the needs of the organisation as a whole, individual levels of consciousness focus on the needs of specific stakeholders. At level one, the focus is on the needs of investors and employees, at level two the focus is on the needs of employees and customers, at levels three, four and five the focus is on the needs of employees, at level six it is on the needs of employees, partners and the local community, and at level seven on the needs of employees, partners and the broader society.

 

“Lower” Needs at Levels One to Three

“Lower” needs at levels one to three focus on the basic needs of business – the organisation’s profit or financial stability, employee and customer loyalty, and high-performance systems and processes. The emphasis at these lower levels is on the self-interest of the organisation and its shareholders. These needs can be never permanently satisfied. If people or organisations operate exclusively at lower levels of consciousness, they can never have enough safety and money, sufficiently good relationships, or enough recognition and power. Fulfilling these needs has a very limited motivational value. It is motivational only to a certain point – when one reaches a certain level in fulfilling their “lower” needs, the fulfilment of these needs no longer brings them satisfaction or motivates them. If these needs are not satisfied, this results in anxiety and fear.

Focus at level four is essential. This is transformation – a shift from fear-based, rigid, authoritarian hierarchies towards a more open, inclusive and adaptive system that encourages people to act with responsible freedom (to assume ownership of the tasks and responsibility for their realisation).

 

“Higher” Needs at Levels Five to Seven

“Higher” needs at levels five to seven focus on cultural alignment, building mutually beneficial alliances and partnerships, sustainable development and social responsibility. As opposed to “lower” needs, these needs do not go away once they are satisfied. On the contrary – they intensify commitment and motivation. The more organisations and people are focused on fulfilling “higher” needs, the higher their motivation and commitment to shared goals.

Organisations focusing exclusively on satisfying lower needs are not market leaders. They can achieve some financial success, but in general they are too internally focused, or too rigid and bureaucratic to become leading market players. They are unable to adapt to changing market conditions: they are inflexible, and do not empower people. Consequently, there is little or no enthusiasm among employees, and a constant lack of innovation and creativity. These organisations are usually ruled by fear, and do not provide a healthy work environment. Employees often feel stressed and frustrated.

On the other hand organisations focusing exclusively on higher needs lack the basic business skills and capabilities necessary to operate effectively. They are impractical and ineffective in financial matters. They are not customer oriented, and they lack the systems and processes necessary for high performance. They simply have no touch with the reality of business. These characteristics are often found in public administration and not-for-profit organisations.

The most successful organisations are those that know how to satisfy their employees’ lower as well as their higher needs. They operate from the full spectrum organisational consciousness – all seven levels. Such organisations generate trust, do well in a complex environment, and can effectively respond to any situation.

 

What do the most successful organisations do?

  • At level one of consciousness – survival – they focus on profit, financial stability and employees’ health and safety.
  • At level two of consciousness – relationships – they focus on open communication, recognition of employees’ achievements and customer satisfaction.
  • At level three of consciousness – self-esteem –they focus on results, performance, quality, excellence and best practices.
  • At level four of consciousness – transformation – they focus on adaptability, innovation, employee empowerment, employee inclusion, and continuous learning.
  • At level five of consciousness – internal cohesion – they focus on developing a culture based on shared values and vision that builds and boosts trust throughout the organisation.
  • At level six of consciousness – making a difference – they focus on building strategic alliances and partnerships with other organisations and the local community, as well as developing mentoring and coaching, and leadership development.
  • At level seven of consciousness – service to humanity and planet – they focus on social responsibility, ethics, sustainable development, their business’s long-term perspective and its impact on future generations, as well as expressing compassion, humility and forgiveness.

The most successful organisations are the ones that have mastered all levels of consciousness, and that understand and know how to satisfy the needs of all stakeholders.

 

Why Are Not All Organisations Like That?

Why don’t they operate from all seven levels of consciousness and do good for themselves and all stakeholders? What do they lack? First and foremost, leaders are often unaware of the actual situation – what the principles that guide the organisation (the entire system) are. Organisations are not independent personalities. They are often led by an “invisible” hand that determines on what they will focus and how they will operate. This “invisible” hand is the mentality of past and current leaders or owners – their values and beliefs. Things that are important to leaders and their beliefs about what is “right and wrong” reflect in whether the organisation has a short-term or a long-term focus, in how employees are led, in whether the organisation only satisfies its own needs or also focuses on how this impacts the development of the broader society etc. Leaders’ skilfulness in making decisions on where the organisation will focus its attention and energy depends on their level of personal consciousness, and their self-management abilities.

 

Cultural Entropy

The more decisions are based exclusively on satisfying personal lower needs, the higher the probability that dysfunctional elements will develop within an organisation. Excessive control that stems from distrust, complex bureaucracy and countless hierarchical levels that demonstrate their power, as well as silo-mentality and hiding of information are just a few symptoms of dysfunctional elements in the organisational culture that they generate. These symptoms are called cultural degeneration or entropy. Cultural entropy is the level of energy spent on unproductive or unnecessary work – the level of conflicts, frustrations, tensions that employees experience in day-to-day work in the organisation, etc. Fear-based actions and conduct of leaders are the main source of entropy in organisations. The higher the level of cultural entropy, the lower is the employees’ commitment and the possibility of the organisation’s long-term success. Cultural entropy results in the organisation’s inability to adapt quickly to external events and to learn fast, which are preconditions for creativity, resourcefulness and the ability to compete.

 

How to Transform an Organisation?

The methodology developed by Richard Barrett emphasizes four key aspects of a successful cultural transformation:

  1. Personal alignment of leaders’ values with their actions and behaviour;
  2. Alignment of values with the organisation’s behaviour, which reflects in their policies, systems and processes (structural alignment);
  3. Alignment of individuals’ values with the organisation’s (values alignment). This is the only way employees can bring their full selves to work.
  4. Mission alignment. Employees need to feel like they know that the organisation is on the right path. They (at least those at higher levels of consciousness) also want to fulfil their mission.

The systemic aspect is reflected in the fact that the focus is not only on the so called “soft” parts of the organisation, such as values, leadership style and motivating employees, but also on “hard” parts of the organisation, such as its structure, systems and processes. Organisations can use Barrett’s tools and methods to identify the principles based on which they are led, and what needs to be done regarding the personal transformation of their leaders, as well as the integration of desired values into their systems and processes, so that they can be transformed to reach a higher level and actively manage their culture. In other words, they will proactively manage their development with the purpose of providing long-term benefits for all their key stakeholders.

 

It is on leaders to manage the organisation so that it performs well.

Performance increasingly more depends on employees’ commitment. This commitment depends on how the organisational culture is aligned with employees’ values. Organisational culture reflects the personal development (conscious and unconscious) of past and current leaders. When commitment is low, reasons should be sought in the cultural dysfunction or so called cultural entropy. Cultural entropy (organisation’s dysfunctions) comes from the energy exhibited by leaders through their decisions, behaviours and shaping of the organisation, which are based on unhealthy foundations (fear of trusting others, fear of losing respect or popularity, or fear of losing positive self-image).

Any organisation that wants to be successful in the long run must constantly manage its culture and values. This way it can pursue two key objectives – constantly decreasing the level of its dysfunction (cultural entropy), and increasing employees’ commitment. As has been proven countless times, these are the two basic causal indicators revealing whether an organisation will continue to perform well financially in the long term.

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