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Organizational Change
Regenerative Business, Part 5:
The Nestedness of Living Systems

In keeping with our theme this year, Regeneration, we're revisiting this insightful blog series from renowned author and regenerative business expert Carol Sanford. This is part five — read parts one, two, three and four.

It is clear to most of the folks I talk with that the primary paradigm, or worldview, that we use to manage businesses (as well as government, education, and families) is causing a major shortfall for humans, economies, societies, and our living Earth. Interestingly, most people can list a few qualities of this paradigm but are unable to speak about a replacement for it, except in platitudes.

For example, reductionism is an old-paradigm quality that people often cite immediately. Some folks will mention fragmentation as a second aspect. When I ask how we’re avoiding the old paradigm as we take on new ways of working for better outcomes, many point to their own intention to “do better by doing good.” But doing good is actually a characteristic of the old paradigm, showing up as the ultimately futile drive to slow the entropic forces of climate change or social decay.

When they advocate for new ventures, good folks with great intentions often fall into the trap of using ways of thinking based on the old paradigm. They cannot see the conflict. Although they are doing less harm to forests or rivers or making great efforts to reduce their overall impact, they are still working only on fragments, still contributing to the causes of degeneration and devolution.

The great need now is not for improvements in parts, but instead for shifts in whole systems. The old way works by cutting parts from wholes and attempting to improve them in isolation. But living systems, the basis of the new paradigm, always work as fully integrated wholes, and those who work with them create cascades of beneficial change through strategic interventions. This is the way businesspeople need to work, by creating enlightened disruption of whole systems for the purpose of regenerating them.

This series of blog posts on regenerative business lays out a way to very clearly understand and speak about a new paradigm, one that sees change through the lens of living systems. I call this paradigm regeneration and here I discuss nestedness, one of its primary principles. Nestedness shows up especially clearly when compared to the old-world view that some call “flatland.”

One Example

When Seventh Generation was founded, it advertised itself as n the producer of environmentally sound cleaning products. It conceived of itself as a better alternative than Procter & Gamble or Unilever, a source of nontoxic products marketed to people who cared about the environment. The company was at war with the producers and distributors of other cleaning products, and its brand soon began to develop a loyal following.

A big shift occurred at Seventh Generation when we started a conversation about the ways in which life is nested and how every life form is dependent on all of the others in its ecosystem. For example, I pointed out that each of us is an individual human dependent on a family and other social units, which in turn depend on a healthy ecosystem. When living systems are undamaged, this interdependence is seamless; there are no absolute distinctions among parts. This was not a concept that most people grasped — at Seventh Generation or anywhere else. At the time, human health and ecosystem health had different advocates, occupying different spheres of influence.

Yet even so, Seventh Generation was already talking about how it was nested in an industry and how it would be possible to move purchases faster if it could help other companies develop the same understanding. It saw the potential to move the entire cleaning products industry and all of its distributors toward more regenerative practices. Understanding nestedness and the wholeness of living systems created a strategic shift for the company. It started marketing to human health, knowing that when families did what was best for the least viable among them — small children, the chemically sensitive, and pets — they were doing what was best for forests and ecosystems. The Seventh Generation logo became a door into a home that was overlaid on an image of Earth.

At the same time, Seventh Generation shifted from competition, another quality of the old paradigm, to collaboration on projects with distributors who were engaged at the same level of outreach to customers. In this way, the company was able to influence Walmart in the development of a new policy requiring transparent labeling from its suppliers, even when transparency was not legally required.

When we see the world as a two-dimensional plane, we base our relationships with others on competition and convincing. When Seventh Generation began to see itself and its suppliers nested within an industry that was nested within local ecosystems on a living planet, it was able to shift its entire strategy. On the day of the aha moment, founder and then-CEO Jeffrey Hollender commented that because he hadn’t been thinking in terms of interdependence or of anything other than defending Earth, good as that had been, the company strategy had been competitive, rather than strategic and nested.

In general, average citizens have some intuitive understanding of the fact that we live in an interdependent world. Most of us can even grasp that some levels of impact are greater than others. Thus we often hear, “If our planet dies, we will have no place to live.” This is usually only a humorous, off-hand remark, but it provides a door to a larger conversation about the way living systems are nested in one another, not just linked with one another on a single plane, and how the magnitude of our effects depend on the level where we position our interventions. This conversation explores how thinking in a living systems way is important to social and planetary health, including the beneficial effectiveness of business outcomes.

Living Systems Theory

Let’s reground ourselves here by returning to what we in business know already about living systems theory. We have heard that life is self-organizing. This idea is often referenced by teams that set up and carry out their own work. Wikipedia defines self-organization as “. . . a process where some form of overall order or coordination arises out of the local interactions between smaller component parts of an initially disordered system. The process of self-organization can be spontaneous …” It is often pointed to when the downside of hierarchical management structure is under examination. Advocates for a new way of managing point out that humans self-organize at home and in their communities, and could do the same thing in their teams at work. There are several work models for just that.

Another aspect of living systems is what we might call self-ordering. This term describes the way nature works in rings of complexity to guide a whole system. One example is social ordering: humans live in families, which are nested in communities within nations on a continent, which is on the planet. In some important ways, the larger rings of the system determine how the smaller embedded systems are ordered. But it can also work in the other direction. Cities have been known to cause shifts across entire nations, as occurred in the 1960s when riots in the Watts neighborhood of Los Angeles increased the push for civil rights across the entire United States, and again in 2001, when the events of 9/11 and New Yorkers’ responses to them precipitated changes in the world at large.

We don’t tend to notice or take into account the nested nature of different scales and powers of systems. This ignorance explains why individuals are unable to see their personal impact on planetary climate; we feel small and insignificant, and Earth seems so large. We don’t seek to understand how personal decisions and patterns of human behavior affect social inequity or how economic theories and the tax systems based on them actually cause disparities in wealth.

Some businesses wake up and become customer- and market-centric when they learn to see that customers are the big Kahuna - the deciders when it comes to purchasing - and thereby have a greater impact on a business’s success than its internal work on efficiency ever can. These businesses understand that, if they ignore their customers in order to focus on improving efficiency, the results will include a downgrade in the qualities of their products that matter most to customers. Understanding the interrelatedness of our effects requires us to think more deeply about the nestedness of systems. Buyers and markets make up a larger whole within which our businesses are nested. They are strongly affected by their local ecosystems and by Earth as a whole, simply by being nested within them. Our way to cause regenerative changes in nature is through thoughtful attention to the lives of customers and what can most improve them.

Far too often, we think instead in terms of power and hierarchies, searching living systems to discover who or what has dominance over other life forms. The organic structure of metabolic functions suggests that hierarchies of order have a very different nature than power relations. The more complexly organized a nested entity is, the larger its pattern-generating role; the larger its role, the more responsible it is for ensuring higher levels of active reciprocity within the system as a whole. This beneficial contribution — far more effectively than competition — helps to ensure the entity’s own ongoing evolution. Thus, beneficial contributions and evolution are the clearest, most effective way to think about nested systems.

A Flatland Journey to Perceiving Nestedness

In 1884, Edwin Abbott — an English clergyman, educator and Shakespearean scholar, published Flatland: A Romance of Many Dimensions, a scientific and mathematical fiction that provided an entertaining view of the mind and explored the complexity of nestedness (in 2007, it was also turned into a computer-animated feature film). The story is a metaphor for human perception and intellectual experience. Its protagonist, A. Square, is a mathematician who lives in the two-dimensional world, Flatland. Here women are perceived as one-dimensional straight lines, the lowliest of beings, whereas men — two-dimensional shapes — are ranked higher socially, depending on their number of sides. Square gives an account of the social and cultural conventions within Flatland and narrates his adventures as he explores other worlds.

At the turn of the millennium, a person named Sphere visits Flatland to introduce Square to the idea of a third dimension, in the hope of educating the Flatland population. Square cannot comprehend the idea of Sphere’s three-dimensional realm until he sees it for himself, and so he visits Spaceland. Here he meets Cube and experiences cylinders, cones, and many other inhabitants. He then dreams of a visit to the one-dimensional world, Lineland, where he tries but fails to convince the monarch that a two-dimensional world exists. The monarch cannot see outside his own experience of straight lines. Square also experiences no-dimensional Pointland, where he reflects on his dimensional travels in the abstract. Ultimately, Square entertains the thought of visiting a land with four dimensions and the possibility of fifth and sixth dimensions, and tries to convince Sphere of their existence. Sphere is offended by this idea and returns Square to Flatland in disgrace.

Once returned, Square finds it difficult to convince anyone of Spaceland’s existence. Each person he speaks with is attached to and limited by the level of complexity from which they view their own world and the possibility of the existence of others — in much the same way that our politics and business practices reflect our own lack of comprehension.

Flatland has long been popular among mathematics and physics students, and lately it has also become a wonderful challenge to business’s view of the world. Imagining ourselves in Spaceland with Square can help us develop the will and imagination to look at our work through the living-systems paradigm and understand how our worlds are nested in orders of interdependent, complex wholes.

When the moment of change arrived at Seventh Generation, most of the players were flat — some were only lines, some were more advanced triangles, and some even more advanced squares. When a sphere became apparent, the company entered a realm where it co-existed with distributors, suddenly seeing them as something other than evil disrupters. As its living systems thinking developed, the company was able to conceive of the changes that later made it a leader in the field of cleaning products and helped Walmart start the transparent-labeling revolution.

Realizing how Earth’s health was intimately connected with family health was Seventh Generation’s trip to another dimensionality. From it, the company developed the insight required for the invention of new product offerings and communication strategies. It learned to tell a different story, just as Square did when he reflected on his adventures in different dimensional realms. As its insight deepened, the company went to work with Whole Foods to open up a new category, advertising with others in the market and supporting the development of other providers, all the while growing its value to investors and building loyalty among customers.

Effects of Flatland Views

When a business thinks from a flatland perspective, they perceive everything as linear, with at most four or five key points to consider, all of them equally important. Business books written by two-dimensional authors point out the four, five, six, or seven strategies necessary for success. Without the shift in paradigm and comprehension of the nested nature of living systems, they are no better off than squares and triangles in a two-dimensional world. Businesses rarely elevate themselves to realms of more dimensions, from which they can take make regenerative contributions to their customers’ lives and their industries’ successes. We are all mostly unaware of the nests we live in, but developing the capability to perceive is the only truly effective way to influence the unfolding patterns that will create our future.

Markets are living systems, characterized by natural ordering and organizing processes. Discovering and understanding these processes enables us to become innovators, but this critical thinking skill isn’t taught in business schools or by other developmental means. Most often, when we begin to perceive them through the fog of our flatland perspective, we are caught by surprise. Nevertheless, the best companies base their work on the ordering and pattern-generating nature of complex living systems nested within larger living systems. Our adoption of this and other aspects of the new paradigm will guide the next wave of effective entrepreneurialism, determine the role we play in mitigating climate, and decide whether or not we create a viable future for ourselves.


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