The Living Organization

A New Framework For Business Success

All leaders must create results. Whether you own your own company,
report to an owner, a board or any other level of the organization, getting
more with less – less time, less effort, less resources – is the bottom line!

The demands on leaders are growing exponentially in today’s Volatile,

Uncertain, Complex and Ambiguous (VUCA) times. We are facing
competition from unexpected sources. Plans are outdated almost as soon
as they are developed. Our employees are feeling more stress than ever. It
can feel like paddling hard against a current that threatens to sink us.

There is a better way. Instead of fighting against the current, why not get
the current to flow in your desired direction?
What Do You Dream Of?
Step back for a moment and think about your organization. Envision the impact it could make
and see the organization achieving that ideal vision.

If you’re like most leaders, you see a highly innovative organization that is creatively
introducing new solutions to make your customers lives better while continuously improving
how it operates internally.

You feel the energy of a highly engaged and committed workforce who are passionate about
realizing the organization’s purpose.

You see the organization executing with focus and agility, self-organizing and self-managing to
fluidly meet the changing dynamics of the industry.

That is the promise and power of The Living Organization®.

The Living Organization® Framework

Have you ever noticed that sometimes the outcomes you achieve happen so easily while other
times it is a struggle consuming lot of resources and time?

It is our prime responsibility as leaders to keep our organizations vibrant and alive. To create
the right environment and remove the obstacles so that the full power of human potential can
emerge.

The Living Organization® Framework is based on how life works, how nature creates results. It’s
the culmination of years of research and life experiences—both successes and failures.

It explains why sometimes getting the necessary results is a struggle, while other times it
happens effortlessly as if by magic.

There are three parts to The Living Organization® Framework.

• Organization as Flows of Energy
• Organization as a Living Being
• A Results Focused Approach for Transformation.
 Organization as Flows of Energy
In his book, The Living Organization: Transforming Business To Create Extraordinary Results,
Norman Wolfe explains how the outcomes we create – whether they are the ones we want or
not – is the result of the interplay of Activity, Relationship and Context energy.

These three fields have an interdependent relationship that creates the outcomes we
experience as defined by Wolfe’s Law:

Activity is the energy we are most equipped to deal with. Activity has only a linear relationship
to the outcomes we create

Relationship is the combined energy of who we are doing it with. Since Relationship energy
affects the Activity and how well everyone performs, it has a significant multiplier effect on our
outcomes.

Context is the energy that drives why we do it. Context includes the meaning, purpose and
stories that people in organizations identify with. Context informs the choices we make and the
behaviors we display.

While Context has the greatest leverage, we achieve results faster, with less resources and
effort when all three forces are balanced and supporting each other.

Everything Flows from Context

Context is an energy field that affects everything inside that field.

Context literally defines how we see the world. It determines the nature and quality of
relationships both internal and external to our organizations. It also defines what is and is not
possible, which determines the choices available to us to address our challenges. For these
reasons, Context has an exponential impact on the outcomes we create

Context is formed from and the deeply held beliefs about how the world works. Beliefs such as
people are trustworthy, or people are lazy; companies exist to make a profit only or companies
exist to make an impact and profit fuels that effort, etc.

These deeply held beliefs form patterns of energy. Like a magnetic field whose field pattern
can only be observed by sprinkling iron fillings over it, context patterns can be determined by
paying attention to the effects it has on the behaviors we exhibit. What is often referred to as
culture, how we do things around here, is defined by Context.

Context energy is created by who we are being while we are

doing what we are doing.

A Metaphor
Consider achieving your goals as the process of rowing. You collect your team and ensure they
are proficient at rowing. This is working with Activity energy.

You also ensure they work well together and are all rowing in the same direction. In addition,
you want to make sure they are in tune with each other and their environment to make the
subtle changes together to maximize their efforts. This is working with Relationship energy.

Context energy is the current of the river you are rowing in. Up till now leaders did not feel
they can do anything about the flow of the river, or its direction. That is why very little
attention has been focused on Context energy. The Living Organization® Framework changes
that.

If you had a choice would you prefer taking your team into the river on the left or the one on
the right?
Working with Context energy ensures it flows in the direction that will carry you to your goals.
If it is aligned with your strategic objectives it will make rowing easy and effortless rather than a
constant struggle against the current.

The Living Organization® Framework ensures Context flows in

the direction of your goals, enables you to create more with less
– less time, less resources and less effort, because you are
drawing on the flow of the river to add to your Activity and
Relationships.
 Organization As A Living Being
How we view organizations has a lot to do with how we address our challenges and
opportunities.

In the traditional view, organizations are machines to be programmed, streamlined and

optimized. Efficiency and predictability are the core principles. Management’s key
responsibility is the machine’s design and programming while the employees’ role is to
contribute their efforts according to the machine’s design.

We recognize a wider perspective when we view the organization as a living system. We see
that it operates in a context of an ecosystem of interdependent entities working together for
the good of the whole. We see how it can learn and adopt to its environment.

Going beyond a living system perspective and viewing it as a living being shifts our focus and
opens up new possibilities. We see it as a creative force contributing to our world. We see it as
one who can learn and adopt, sense and respond. We see it as a living person with a soul, a
heart and a personality to be nurtured and developed. We help it grow in capability and
maturity so that it can reach its fullest potential.

Machine The Living Organization®

Produces Creates
System of Discreet components Organic Interdependent
Do as it is told Learns and Adopts
Purpose is to “Do” Purpose is to Serve
Predict and Control Sense and Respond
Transactional Relational

Living Beings Create Context

Context energy patterns takes shape by the choices made by living beings. This is one of the
major differences between living beings and machines. Machines can only do what they are
told.

Only living beings make choices that give meaning to life and life’s events. This process of
giving meaning forms the patterns of the Context field and defines the way we behave. In fact,
context is defined as, “shedding light on the meaning that allows the thing to be understood.”

Every person has their own unique context, their own way of seeing the world and their own
unique way of responding to it. Fortunately, we also have enough similar context that allows us
to successfully interact and communicate. You won’t have to search far to think of those times
where you interacted with someone whose context was different than yours. It’s as if you were
living in two different worlds. And you are.

Organizations have their own unique Context, which is formed during its startup years. Like a
young child experimenting in their early years with what works for them and what doesn’t,
giving meaning to events and experiences, which creates their unique life’s Context. A young
organization also experiments with what works and what doesn’t during its early years, and
forms beliefs that create the pattern of its unique Context.

Developing the Organization

An organization’s ability to execute and grow is directly related to its capacity. In the traditional
view, the capacity is often thought of in terms of plant and equipment. When we view an
organization as a living being, we see that capacity is driven more by the capability and maturity
of the organization. More specifically, the capability and maturity of the leaders, the people
and the processes.

A person who has to perform above their level of capability will feel stressed. Increase their
capability and the same work level is easy to accomplish. A person who is less mature will be
resistant to constant change while a person who has a higher degree of maturity can take
changing situations in stride.

Similarly increasing the maturity and capability of leaders and processes equally creates the
ability to do more with less. As the organization, its people and processes mature and become
more capable, there is less need for leadership direction and even development. Organizations
become self-managing learning organizations, fluid and self-organizing around the needs of
customers and markets.

"In the machine paradigm, Activity is all there is. Founders and CEOs of the
pioneer organizations researched for this book start from the opposite end. Their
most critical role―holding the space―has entirely to do with the energy field of
Context."
Frederic Leloux, Reinventing Organizations p.250

New Role of Leaders

By now you understand the power of Context and how it defines what Activity is done, the
nature and quality of Relationships and what is and is not possible. Shifting focus to setting and
guiding the Context is the most critical role of leaders.

Equally as important is creating the capacity to execute, which the leader accomplishes by
developing the capability and maturity of the organization, its people process and leaders.
We want to develop them in all fields of energy, Activity, Relationship and Context. Activity is
the skills and ability to get things done. Relationship is developing their ability to interact, the
interpersonal and emotional skills. Context is developing the ability to deal with change,
complexity, differences, ambiguity. It is increasing organizational maturity.
 The Living Organization® Approach
We have many tools that we have traditionally employed to help us lead our organizations. We
have SWOT analysis and the Balanced Scorecard to help track our progress with strategy. There
is Lean, Agile, Design Thinking and other process improvement models to increase operational
effectiveness. We have methodologies for new product development, innovation, change
management and even culture change.

These tools were created when viewing the organization as a machine. Through that lens, it
makes perfect sense that these methodologies focus primarily on the Activity field. The Living
Organization® Approach utilizes modified versions of these methodologies to include the
Relationship and Context. This allows us to address common challenges with a more robust
and detailed view of the organization. It allows us to make Relationship and Context an explicit
part of the process.

Context can be known

Though Context energy lies under the surface within the organization’s unconscious, it can be
identified and described. We can discern the pattern and make what is implicit explicit. Once
identified and described we can intervene as needed.

Transforming Context from implicit to explicit is the highest

leverage return for leaders of a Living Organization.

Since everything flows from Context, we can understand the underlying context by observing
rituals and behaviors of everyday life, especially those that are done without thinking.

We can also listen to the stories that give meaning to how things are done. Remember Context
is the process of giving meaning and how the meaning is communicated and picked up by
everyone involved. Organizational stories reveal the underlying Context.

Since Context is energy and energy can be felt, we can train ourselves to tune into the energy of
the organization. While this may seem at first to be difficult, it is not as uncommon as you
might think. Think of a time when you entered a group of people and without saying anything,
you sensed the mood of the group. The moment you entered the room, you “felt” the mood.

We all have the ability to sense energy and do it all the time. We sense the energy around us
and make decisions about what we sense. We just are not often conscious of it. As an
example, I know many leaders who have made decision purely on the basis of “their sense of
the situation.”
It is not something they necessarily know logically, they simply “feel” the rightness of their
choice. They are sensing the underlying Context and choosing a course of action to respond to
it. This could be on a macro level such as sensing the direction of the market, or on a micro
level as in one-on-one negotiation and “reading” the other person.

Core Skills for Leading The Living Organization®

In addition to learning to use the modified versions of familiar tools and methodologies, there
are certain key skills that allow a leader to effectively balance Activity, Relationship and Context
to achieve maximum results with less effort, less time and less resources.

Wisdom of the Heart – The rational mind, while important to creating outcomes, can only go so
far. Its information is limited to only what we know and ignores the realm of the imaginative
and intuitive. The Wisdom of the Heart is a path to developing the skill of combining the
rational to the intuitive. It also opens us to compassion and connection with our deeper selves
and that of others enhancing our relationships. It is key to being able to read, sense and feel
the Context field. It brings action with calm and certainty to navigate through times of
uncertainty, complexity and volatility

Improv Mindset – Life is complex and unpredictable. No matter how you plan, some event will
turn up that was totally unforeseen. An Improv Mindset helps you take advantage of the
surprise opportunities and challenges of life. It helps you flow naturally with whatever shows
up. It is a skill that has been taught for thousands of years in other fields which we draw on to
prepare the organization to sense, adapt, self-organize, respond and locally-attune to whatever
happens. To make decisions responsively where and when the challenges arise, guided by the
context of the Strategic Compass™

Polarity Thinking – In a complex world, there is no one right way. When asked, for example, if
we should focus on innovation or focus on efficiency, the answer is often, Yes. We have to
focus on both and do both well. There are many choices that involve learning to say yes to
what appear to be opposing options, polarities. We have adopted the work of Barry Johnson
who developed Polarity Thinking® a method for learning to utilize the energy of opposites. Each
pole carries benefits and consequences. The right path is the one that maximizes positives and
minimizes the negative. For the given situation.

Storytelling & Ritual – Context energy patterns are created by the stories we tell about how life
works, what it means and the rituals that reinforce those beliefs. With the skill of storytelling
and building rituals, leaders can reframe and set a new Context for their organization. They can
craft and mold the Context to flow in the direction of their strategic goals and significantly
increase the impact they make.
CONCLUSION
The current business context requires organizations to become ever more emergent, innovative
and adaptive. We must develop our leaders, our people and our living organizations to be
empowered, agile and engaged. The focus of leaders has to shift to nurturing conditions that
unlock creative potential, so the organization can adapt, learn and flourish in a purposeful and
coherent way.

This is not some utopian dream: it’s happening now as you read this paper. Countless
organizations are experimenting with various aspects of operating more as a living being than
as a machine. They are thriving amid the complexity and uncertainty of today’s world. Among
them are: the healthcare provider Buurtzorg, the bank Triodos, the employment agency Vaga,
the hi-tech manufacturer W.L Gore & Associates, the global network of social-enterprise
community centers Impact Hub, the multimedia provider Sounds True, and the Brazilian
manufacturer Semco.

We are in the midst of a radical shift in society and a commensurate shift in our philosophic,
scientific and managerial understanding of organizations; and with it, our sense of place and
purpose within them.

Our organizations are energy fields of relationships, immersed within the economic, social and
ecological systems of our world. The more conscious we become of these energetic inter-
relationships, at the Activity, Relationship and Context level, the more we will be able to help
our organizations thrive in the challenging times ahead.

The Living Organization® Framework offers an implementation path for transforming to the
new model of successful organizations.

This short paper points to the essential elements that need to be addressed within this
transformation to a new mind set, and a new way of operating and organizing. For more
information, please contact the co-authors:

About the Authors

Norman Wolfe is CEO of Quantum Leaders, he is a leading voice in bringing about a
transformation of the core paradigm of business. You can reach Norman at
nwolfe@quantumleaders.com.

Vitaly Geyman is a Principal Consultant at Quantum Leaders, he advises CEOs and Executives
on how to implement The Living Organization® Framework, matching it to the unique nature of
their organizations. You can Vitaly at Vitaly@quantumleaders.com

Learn more about The Living Organization® and the services and products of Quantum Leaders
at www.quantumleader.com