martes, diciembre 30, 2014

Why members of Boards of Directors must also change their common sense first

Steve Denning has contributed to Forbes another excellent article: Reward Directors' Poor Performance With A Hefty Raise? Next you can see my comment slightly edited on form on how directors must work and Mr. Denning's response:
“… the third level of explanation, the ‘structural’ explanation, is the least common and most powerful. It focuses on answering the question, “What causes the patterns of behavior?” – Peter Senge

Dear Steve Denning,

You write that “It is the responsibility of directors to ensure that these changes happen and that firms pursue the right goal. If directors were to lead that charge, force the abandonment of the shareholder value theory in their firms and refocus their organizations on the right corporate goal, they would certainly deserve a raise. That however would take considerable courage and would involve very different behavior from what we are seeing today.” To have such different behavior, Shouldn't those directors behave by fully comprehending such “structural explanations”?

In the next two paragraphs is what I wrote on the blog post Why the Eurozone leaders must change their common sense first.
In the “more than 1 million copies in print,” of the “revised and updated with 100 new pages,” in the 2006 book in front of me, “The Fifth Discipline: the art & practice of the Learning Organization,” written by Peter Senge, it says that “The system perspective shows that there are multiple levels of explanations in any complex situation… In some sense, all are equally ‘true.’ But their usefulness is quite different.” I guess that high quality journalism is not just about “event explanations,” which Senge says “are the most common in contemporary culture, and that’s exactly why reactive management prevails.”

Instead, he says that “Pattern of behavior explanations focus on seeing longer term trends and assessing their implications,” which seem to fit with today’s good journalism.
Then he adds what the introductory quote says.

Happy New Year!!!

José Antonio Vanderhorst Silverio, Ph.D.
Consulting Engineer on Systems Architecting

Called-out comment

Author reply
Steve Denning Steve Denning, Contributor
Dear Jose (A Vanderhorst)

Thanks for your insightful comment with which I agree. We need to get to a system-level understanding of the problem, not just an event-type explanation.

Called-out comment

All 93 posts on Business Model Innovations on the EWPC Blog changed to Institutional Innovations

I just learned that I have been writing about business model innovations when I should be calling it institutional innovations on the Electricity Without Price Controls (EWPC) Blog. Please consider every one of those mentions to be replaced from now on. One concept that unites both business model innovations and institutional innovations concepts is that they are both systems architecture innovations that emerge with minimalist architectures.

Here is the source for the change. In his blog post Challenging Mindsets: From Reverse Innovation to Innovation Blowback, John Hagel writes that "This is not a question of business model innovation or the management innovation that Gary Hamel talks about. Those forms of innovation are still contained within a single enterprise. Institutional innovation is different - it defines new ways of working together, ways that can scale much more effectively across large numbers of very diverse enterprises."

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