Articles

Articles

On this page I publish articles regarding models, insights and material. You're more than welcome to contact me if you have any questions.

Office vs. remote work: Navigating the future of work

2024-09-01, by Johan Hildingson (formerly Lagerström) - Type: Focused insight - Depth and reflection: Medium - Reading time: ~15 min

Background

The COVID-19 pandemic drastically altered the work landscape, making remote work the norm for millions worldwide. This shift brought both expected and unexpected outcomes, prompting companies to rethink traditional models of collaboration and communication. As we gradually return to a more "normal" work environment, a crucial question arises: What is the best work model for the future? Should we return to offices, or should we continue to embrace remote work? This article delves into the pros and cons of these work models and explores how companies can strike a balance that benefits both productivity and employee well-being.

Google admits its mistake

Google, a company that previously pushed for employees to return to the office, has recently admitted that they may have been wrong. Sundar Pichai, Google's CEO, acknowledged that it was premature to assume that a return to traditional office work would boost productivity. This reflection mirrors a broader uncertainty about what truly works best in our new work reality (Google Blog, 2023).

Adding to this, Eric Schmidt, former CEO of Google, recently confessed in an interview with Fortune that he had underestimated the effectiveness of remote work. Schmidt initially doubted that remote work could maintain the same productivity levels as office work, but time has proven him wrong (Fortune, 2024, >>>). This marks a significant shift in how some of the world's most influential tech companies view the workplace and the future of work.

The traditional Communication Model

In organizational communication, the so-called "communication ladder" (Stanford University, 2022) has long been a benchmark. This model emphasizes different levels of communication depending on the need for proximity and directness:

Traditionally, this model has been considered the most effective for ensuring clear and efficient communication within organizations. However, in today’s work environment, it may no longer be sufficient. Research suggests that too rigid an application of this ladder can be ineffective and even harmful to creativity and innovation (Harvard Business Review, 2020).

Advantages of remote work

Remote work offers several unique advantages for organizing effective workshops, particularly regarding flexibility and participant engagement. A skilled workshop facilitator can leverage the digital tools that remote meetings provide. Research from MIT Sloan Management Review highlights that remote meetings often offer a fairer representation of participants' contributions since it's easier to identify who is active and who needs encouragement to participate ("Virtual Meetings: A New Tool for Equality" - MIT Sloan Management Review, 2022).

In digital workshops, facilitators can easily create breakout rooms for small group exercises, allowing for agile adjustments based on the situation's needs and the participants' engagement. This is a significant advantage over physical meetings where adjustments can be more time-consuming and logistically complex. Additionally, technical issues commonly associated with physical meetings, such as booking rooms or handling presentation equipment, are minimized. Remote meetings also allow for a smoother transition between different activities and the use of digital tools that can facilitate collaboration (Deloitte Insights, 2023).

Caption: Remote work enhances workshop effectiveness through increased flexibility, improved participant engagement, and efficient use of digital tools. Studies show that remote meetings often result in fairer representation, better meeting efficiency, and the ability to quickly adapt to changes, while minimizing technical issues and logistical challenges. However, the flexibility of remote work also comes with potential downsides, such as last-minute cancellations, which can impact participant respect and engagement. 

A study by Gartner showed that 68% of employees feel that remote tools improve meeting efficiency compared to traditional meetings ("Reimagining the Future of Work" - Gartner, 2022). This is partly because digital meetings are often more structured and goal-oriented, leading to fewer interruptions and a clearer agenda.

Remote work also offers the advantage that meetings can be concluded more quickly if they prove unnecessary. This makes it easier to switch between meetings or act swiftly when other tasks demand attention. However, a downside is that this flexibility sometimes leads to last-minute cancellations, which can signal a lack of respect for others' time. Research indicates that this can cause employees to feel undervalued and less engaged (Forbes, 2021).

It’s also important to highlight that remote work can be advantageous in workshops by allowing participants to work both individually and in groups. As discussed in a previous article, it’s crucial that a workshop not only divides participants into groups to work towards a solution but also creates space for individuals to think independently. By combining these two approaches, solutions can be well-founded, and all perspectives considered, reducing the risk that one or a few voices dominate and negatively impact the outcome (David JP Phillips, 2022).

Downsides of remote work

Despite the many advantages of remote work, significant downsides must be considered. One of the most prominent issues is the feeling of isolation and loneliness that can arise when employees work from home for extended periods. A study by the American Psychological Association (APA) found that employees working from home during the pandemic were 30% more likely to develop depression compared to those working in an office ("Remote Work and Mental Health" - APA, 2021). The study, conducted with over 3,000 participants, found that the lack of daily social interaction and support from colleagues was a major cause of these negative effects.

Another study by Microsoft revealed that remote work often leads to longer workdays, with an average increase of 1.5 hours per day ("The Effects of Remote Work on Productivity and Well-being" - Microsoft, 2022). This increase in work time often occurs because the boundary between work and personal life becomes blurred, making it harder for employees to relax and recover. This phenomenon is particularly concerning as it can lead to long-term health problems that negatively affect both the individual’s well-being and the company’s productivity.

Research from Worklytics identifies the top five leading indicators of stress and burnout among remote and hybrid employees. This research underscores the importance of monitoring employee well-being and taking action to prevent burnout, especially when remote work becomes prolonged ("Top 5 Leading Indicators of Stress and Burnout in Remote/Hybrid Employees" - Worklytics, 2024).

Caption: This graph from Worklytics demonstrates the correlation between extended work hours and increased stress levels among remote workers. The left axis represents the average number of hours worked per week, while the right axis shows corresponding stress levels. As remote work environments blur the lines between personal and professional life, employees tend to work longer hours, leading to heightened stress. The graph highlights a critical inflection point where increased work hours directly contribute to rising stress and burnout rates. This visualization underscores the necessity for clear boundaries and proactive employer support to mitigate these risks and foster sustainable work practices in remote settings (Worklytics, 2022, >>>).

From a psychological perspective, the negative effects of remote work can be understood through Maslow's hierarchy of needs. Maslow's theory emphasizes the importance of social relationships and belonging as fundamental human needs. When these needs are not met, which is often the case with prolonged remote work, it can lead to decreased engagement and reduced job performance ("The Theory of Human Motivation" - Maslow, 1943). 

Philosophical and psychological perspectives

The debate over whether office work or remote work is superior delves into both practical and philosophical dimensions, with various thinkers shedding light on these complex issues.

In discussing the balance between freedom and structure in remote work, it is crucial to recognize how these concepts apply in this context. Erich Fromm’s ideas on "freedom from" and "freedom to" highlight that while remote work offers freedom from traditional office constraints, it also risks leading to isolation and a sense of meaninglessness if not properly managed ("Escape from Freedom" - Fromm, 1941). This perspective underscores the need for a structured approach to remote work to maintain a sense of purpose and prevent disconnection.

Similarly, the limitations of remote work on learning and development are significant. Albert Bandura’s Social Learning Theory highlights how traditional office environments facilitate learning through everyday interactions with colleagues. Informal conversations at the coffee machine or impromptu problem-solving discussions in the hallway often contribute to skill acquisition and knowledge transfer. Remote work, however, diminishes these spontaneous learning opportunities ("Social Learning Theory" - Bandura, 1977). For instance, a junior employee may miss out on the informal mentoring and immediate feedback that typically occurs in an office setting, which can impact their professional growth and team cohesion. Furthermore, Carl Jung’s theory of individuation emphasizes that personal growth is closely tied to direct engagement with others and the external environment ("The Archetypes and The Collective Unconscious" - Jung, 1954). The physical separation inherent in remote work can disrupt this developmental process. For example, an employee who thrives on face-to-face brainstorming sessions may struggle to achieve the same level of creativity and personal insight in virtual meetings. This underscores the need for strategies that support skill-building and collaboration in remote settings, such as virtual workshops or scheduled team-building activities, to maintain employees' professional identities and foster their personal development.

On the other hand, the advantages of remote work are profound and transformative. Research highlights that remote work dramatically enhances work-life balance by allowing employees to integrate their personal and professional lives more seamlessly ("The Future of Work: Trends and Insights" - Deloitte, 2023). This flexibility not only reduces stress but also significantly boosts job satisfaction and overall well-being, as individuals can tailor their work environment to better suit their needs and preferences.

Moreover, remote work has been shown to significantly boost productivity. Studies reveal that employees often experience fewer distractions and interruptions compared to traditional office settings, leading to heightened focus and efficiency ("Remote Work and Productivity: An Empirical Analysis" - Harvard Business Review, 2022). This environment enables individuals to achieve better performance outcomes and engage more deeply with their tasks, underscoring the substantial benefits of remote work.

Remote work also supports a broader range of talents and skills by removing geographical barriers to employment. This inclusivity not only diversifies teams but also enhances creativity and innovation within organizations. As remote work continues to evolve, companies can leverage this flexibility to attract top talent from across the globe, further enhancing their competitive edge.

These perspectives collectively illustrate that while remote work presents challenges related to social interaction, personal growth, and overall satisfaction, it also offers transformative benefits such as improved work-life balance, increased productivity, and access to a wider talent pool. Balancing these benefits with strategies to maintain meaningful connections and support employee development is essential for creating a sustainable and fulfilling remote work environment.

Personality types and work environments

Different personality types can thrive in various work environments. According to the Myers-Briggs Type Indicator (MBTI), introverts often prefer remote work due to the quieter, less stimulating environment it provides. This setting allows them to concentrate deeply and avoid the stress of constant social interactions, which can be overwhelming (Myers & Briggs Foundation, 2022). Introverts may find that remote work aligns well with their preference for solitude and structured individual tasks.

Extroverts often find office settings more energizing due to the social interactions they facilitate. The collaborative energy of office environments, with opportunities for spontaneous discussions and networking, can be highly motivating for extroverts. This setting supports their need for external stimulation and social engagement, which can enhance their productivity and job satisfaction (Myers & Briggs Foundation, 2022).

The Big Five personality traits provide a comprehensive framework for understanding how different individuals might adapt to various work environments. This model includes five major dimensions: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism (Costa & McCrae, 1992).



The distribution of the Big Five personality traits varies among individuals, with some traits being more commonly exhibited than others. Neuroticism is notably prevalent, with many individuals demonstrating higher levels of emotional instability compared to other traits; indeed, it is often considered one of the most common traits. Openness and conscientiousness tend to be more evenly distributed, with a broad range of moderate levels observed. Extraversion varies widely, spanning from highly extroverted to introverted individuals. Agreeableness generally follows a normal distribution, with most people displaying moderate levels. This variation influences preferences for different work environments and overall work behavior. (McCrae & Costa, 1997) (Costa & McCrae, 1992)

Caption: The Big Five personality traits model illustrates the five dimensions of personality that influence work preferences and performance. Understanding these traits can help tailor work environments to better suit individual needs and enhance job satisfaction.

Research supports the idea that allowing employees to choose their preferred work environment leads to greater job satisfaction and productivity. A study by Buffer found that employees who could choose between remote and office work were 32% more satisfied with their work arrangements compared to those who were required to follow a set model ("State of Remote Work" - Buffer, 2023). This flexibility allows individuals to work in an environment that best suits their personality and working style, leading to improved well-being and effectiveness.

The evolution of office environments also reflects changing work needs and preferences. Traditionally, offices featured private rooms and fixed desks, but these have evolved to open-plan layouts with flexible seating arrangements. This shift was driven by the need to maximize space and reduce costs. Recent trends have seen a rise in hybrid models, which blend remote work with occasional office use, further highlighting the growing recognition of individual preferences in optimizing work arrangements. Adapting to these changes, while considering personality traits, can enhance both employee satisfaction and organizational efficiency.

Summary

The ideal work environment is one that allows employees to choose the work model that best suits their personal needs and preferences. Remote work offers significant flexibility and the opportunity to create a tailored workspace, while office settings provide valuable face-to-face interactions and immediate problem-solving. Empowering employees to decide between working from home or in the office can lead to increased job satisfaction and productivity. This approach respects individual preferences and allows each person to optimize their work environment for their own effectiveness and well-being ("The Future of Hybrid Work" - McKinsey, 2023). 

However, it's important to consider that social interactions and team cohesion remain crucial for a successful work environment. These interactions don’t necessarily have to occur in a physical office but should be incorporated into the work model in ways that foster connection and collaboration. Companies can support this flexibility by investing in technology, establishing clear communication strategies, and being responsive to employee needs. By balancing individual choice with effective virtual social interactions, organizations can enhance overall productivity, improve morale, and promote a healthier work-life balance.

As we navigate the future of work, remember the words of Steve Jobs: "The only way to do great work is to love what you do." By embracing the flexibility to choose the work model that best suits our individual needs, we can create environments where everyone thrives and achieves their highest potential.

My top pro tips

 

 

AML2024: A compact summary for international banks

2024-08-17, by Johan Hildingson (formerly Lagerström) - Type: Essentials - Depth and reflection: Low - Reading time: ~10 min

Introduction 

Anti-money laundering (AML) regulations have always been at the heart of financial security. However, with the rapid advancement of technology and the globalization of financial transactions, new risks have emerged, making it increasingly challenging for institutions to comply with regulatory standards. The European Union’s AML2024 package, which includes the Sixth Anti-Money Laundering Directive (AMLD6) and the establishment of the Anti-Money Laundering Authority (AMLA), represents the latest effort to bring uniformity, transparency, and enhanced scrutiny to banks and other financial institutions across Europe.

This article delves into the key components of AML2024, outlining the critical changes and their implications for international banks. From daily updates to sanctions lists and enhanced customer due diligence (CDD) requirements to 24/7 system availability and external security audits, AML2024 sets a new standard for compliance. Understanding these changes is essential for any financial institution aiming to navigate this new regulatory landscape.

Understanding the AML2024 and the EU AML Directives

The terminology used in Anti-Money Laundering (AML) regulations can sometimes lead to confusion, particularly when distinguishing between various directives and updates within the European Union's framework. AML2024 is often used to describe the latest package of anti-money laundering regulations in the EU, but it is important to note that this is not a specific directive itself. Instead, AML2024 refers to the broader regulatory package, which includes the Sixth Anti-Money Laundering Directive (AMLD6) and the introduction of the Anti-Money Laundering Authority (AMLA).

The EU has introduced several iterations of AML directives over the years, each building upon the last to address new challenges and enhance compliance measures across member states. These directives are typically named AMLD1, AMLD2, etc., indicating their sequential order:



AMLD (Anti-Money Laundering Directive) refers to specific iterations of EU regulations introduced over time. These directives progressively introduce new requirements and improvements based on emerging financial threats, international standards (such as those from the Financial Action Task Force (FATF)), and evolving financial technologies.

On the other hand, AML2024 is not an individual directive but rather a reference to the most recent regulatory update package, which includes AMLD6 and the establishment of AMLA. This terminology shift reflects the EU’s focus on broader compliance, not just through individual directives, but also through centralized enforcement and oversight mechanisms.

In short, AMLD1 to AMLD6 refer to specific legislative steps taken by the EU, while AML2024 refers to the overall package, including AMLD6 and new centralized controls, designed to improve the effectiveness and consistency of anti-money laundering measures across Europe.

Caption: AML2024, including the Sixth Anti-Money Laundering Directive and the introduction of the EU's Anti-Money Laundering Authority, brings tougher penalties, harmonized rules, and enhanced oversight for international banks. With mandatory updates, increased transparency on beneficial ownership, and risk-based monitoring, it sets a new standard in combating financial crime across Europe.

New with AML2024

Below are the major updates regarding AML2024.


*Clarification for point 7: AML2024 does not require banks to monitor every customer individually in extreme detail. Instead, it mandates the use of broader and more up-to-date risk scenarios tailored to different risk profiles. Banks are expected to expand their range of monitoring scenarios, focusing on high-risk categories (e.g., high-risk countries or industries) and updating them based on the latest threats. This allows banks to improve their risk assessments without needing to monitor every individual customer in minute detail.

Non-functional requirements under AML2024

AML2024 sets several new specific non-functional requirements that banks must follow to ensure their AML systems are reliable, secure, and performant. These include:

Caption: This timeline shows the phased rollout of the AMLA (Anti-Money Laundering Authority). Key milestones include AMLA’s legal establishment in 2024, the opening of its Frankfurt office in 2025, the commencement of operations in 2025, and full operational capability by 2028. By 2027, AMLA will directly supervise 40 high-risk entities across the EU. This timeline highlights AMLA’s evolving role as the central authority to strengthen anti-money laundering oversight and ensure compliance across member states.

Deep-dive: Relevant legal terms

To better understand the hierarchy and role of different legal terms in AML and EU regulations, the following key concepts provide some clarity.


The legal hierarchy in most legal systems, particularly within the EU, operates in a structured manner where each level refines or applies the one above it. This ensures that the most important legal principles remain consistent across different types of legal texts:


Each level of the legal hierarchy has a specific function and further defines or enforces the previous one. This ensures that the legal system operates smoothly, with clear guidelines and compliance structures for individuals, corporations, and governments:

This structure ensures that each legal concept refines or enforces the rules set out at higher levels, ensuring clarity and consistency in the legal framework across different sectors and jurisdictions.

So what is AML then?

Anti-Money Laundering (AML) refers to a set of regulations and frameworks designed to prevent the illegal practice of disguising the origins of illegally obtained money (often from crimes like drug trafficking or terrorism) and integrating it into the legal financial system. AML is not a single law but rather a combination of international guidelines, EU directives, and national laws aimed at combatting money laundering and the financing of terrorism.

At the international level, organizations such as the Financial Action Task Force (FATF) create AML standards that countries adopt. Within the European Union, these standards are turned into AML Directives (e.g., AMLD1 through AMLD6). Directives are legislative tools that require each member state to transpose them into national law, meaning each country adapts these rules into their own legal system, in line with their constitutional and legislative processes.

Once transposed, AML directives are implemented as national laws that bind financial institutions and other sectors, setting out obligations for customer due diligence, transaction monitoring, and reporting suspicious activities. These national AML laws ensure that both businesses and governments actively work to detect and prevent money laundering activities.

In short... AML is a package of directives at the EU level, which sets out rules that each member state must implement through national laws.

Summary

International banks must adapt their risk management strategies, improve their technical systems, and collaborate closely with both AMLA and national authorities like FIPO in Sweden.

The new aspects of AML2024 include the daily updates to sanctions lists, the requirement for 24/7 system availability, and the introduction of external security audits. These measures are designed to ensure that banks' AML systems are constantly up to date, operational at all times, and externally verified for compliance and security.

The new rules will take effect from July 2025, with full implementation by December 2025.

My top pro tips

Sources
  • KPMG, 2024, www.kpmg.com, Overview of AML2024 requirements and system capabilities for compliance.
  • Mayer Brown, 2024, www.mayerbrown.com, Details on AMLA’s supervisory powers and system requirements for compliance in high-risk institutions.
  • ComplyAdvantage, 2024, www.complyadvantage.com, Insights on non-functional requirements related to sanctions and data protection within AML/CFT frameworks.
  • FinCEN, 2024, www.fincen.gov, Overview of the proposed rule changes to strengthen AML/CFT programs in the US.
  • AML Intelligence, 2024, www.amlintelligence.com, Information on the EU's new AML2024 laws and AMLA.
  • AMLA, https://finance.ec.europa.eu/financial-crime/amla_en, AMLA directives.
  • EUR-Lex, 2024, www.eur-lex.europa.eu, Detailed explanation of the hierarchy of norms in EU law, including the classification of primary, secondary, and international agreements within the EU legal system.
  • Riksdagen, 2024, www.riksdagen.se, Overview of how EU laws and rules interact with Swedish law, including the precedence of EU law over national legislation and the process for implementing EU directives and regulations in Sweden.
  • European Parliament, 2024, www.europarl.europa.eu, Clarification of the sources of EU law, including the role of directives, regulations, decisions, and their impact on national laws.

 

 

The power of stable process models: Why Actors outlast Roles and Persons

2024-08-10, by Johan Hildingson (formerly Lagerström) - Type: Essentials - Depth and reflection: Medium - Reading time: ~15 min

Background

Studies show that between 60-80% of BPM (business process management) projects are considered failures by the organizations that initiate them. (Trkman, 2010) (Castro et al., 2020) BPM involves analyzing, designing, and optimizing business workflows to improve efficiency and alignment with organizational goals. But what exactly are these projects failing at? Ironically, many of them struggle with delivering the very outcome they aim for: effective processes.

Organizations frequently end up with workflows that don’t align with strategic goals, become outdated too quickly, or suffer from communication breakdowns across departments. (ShiftX, 2023) (Leopold et al., 2015) These issues point to a common pattern: a failure to create well-designed and managed processes. Whether it’s aligning workflows with objectives, ensuring consistency, or driving adoption, the root cause often lies in gaps in process development and change management. (Castro et al., 2020) (ShiftX, 2023)

In my work as a specialist in enterprise architecture, process management, project leadership, and change management, I’ve identified several factors that contribute to creating more stable processes. In this article, we focus specifically on the concept of Actors to understand how it enhances stability. What are Actors, why do they matter, and how can they bring lasting value to your organization?

Understanding the key concepts: Person, Role, Actor

To fully grasp the importance of Actors in process modeling, it's essential to clarify the difference between Person, Role, and Actor...


Caption: This diagram illustrates the distinctions and overlaps between the concepts of Actor, Role, and Person in process modeling. An Actor represents the function or responsibility in a specific context (e.g., a reviewer), a Role refers to the official job title (e.g., Enterprise Architect), and a Person is the individual (e.g., Johan) performing the task. The intersections highlight how these concepts interact, showing, for example, that a Role combined with a Person defines an employment relationship, while an Actor combined with a Person describes a specific task assignment. Additional overlaps such as "Responsibility", "Task", and "Assignment" provide deeper insights into how these roles are allocated within organizations.

These three concepts overlap but are distinct. For instance, someone with the role of "EA Architect" may take on the actor function of a "Reviewer" within a specific project, even though the person is technically "Johan". This distinction allows for more flexible and stable process models. (Astrakan, 2017) (UML, 2022) (BPMN, 2023) (Diploma, 2020)

Additional key concepts

To fully understand the relationships illustrated in the Venn diagram, let’s further explore some associated terms...


These additional key concepts provide a clearer understanding of how Actors, Roles, and Persons interact within process models, helping to establish stable, scalable, and adaptable workflows that align with organizational goals.

Why actors provide stability

In process modeling, an Actor refers to the function or responsibility something (or someone) takes on within a specific context. This function remains stable even when the person or system fulfilling it changes. By contrast, roles and individuals are much more dynamic—organizations evolve, people change positions, and job titles are redefined. This makes Actors the key to creating stable and long-lasting process models. In the context of a business model (e.g., UML Process model), Actors are considered the most stable components for several reasons...



Focusing on Actors allows organizations to design processes that are more adaptable and resilient, even amid significant changes. This approach ensures continuity and efficiency, regardless of staff turnover or evolving business needs. (Leopold et al., 2015) This flexibility is a primary reason why Actor-based models remain favored in enterprise architecture and process management strategies.

Recommended documentation artifacts

When implementing Actor-based process models, effective documentation is crucial for ensuring clarity and consistency across the organization. Well-structured artifacts can streamline communication, support decision-making, and facilitate process improvements over time. Below are my recommended documentation artifacts within this domain, each serving a distinct purpose...



By establishing and maintaining these documentation artifacts, organizations can achieve better visibility and control over their Processes. Clear documentation not only supports process stability but also helps future-proof operations by enabling smooth transitions during organizational changes. Consistent use of these artifacts ensures that the core functions and responsibilities remain intact, even when Roles or individuals evolve over time.

The everlasting question - Why?

When diving into the world of process modeling and business architecture, one question consistently comes up...

"Do we really need to introduce more concepts, governance documents, etc.?"

It’s a fair concern—when people hear about adding more terminology and concepts, especially in an already complex environment, they often feel frustrated. The suggestion to introduce additional layers of abstraction or governance can seem counterproductive and overwhelming, especially for those already struggling to manage current processes. The confusion usually arises because the distinctions between Actors, Roles, and Persons aren’t immediately obvious, leading to the belief that adding more layers might complicate things rather than simplify them. People frequently ask, "Why make things more complicated? Why can’t we stick with what we already know?".

However, this frustration usually stems from not seeing the bigger picture: how introducing the right level of abstraction can actually simplify processes in the long run. Here’s how these additional concepts will ultimately help:



Understanding these distinctions may seem complex at first, but they lay the foundation for long-term clarity, stability, and efficiency. This additional layer of abstraction is what ultimately brings clarity and long-term stability. The initial frustration often comes from not recognizing how these concepts actually simplify the overall system, making it more adaptable and sustainable. The key lies in understanding that by introducing the right level of structure and abstraction, processes become clearer, more resilient, and easier to manage. These distinctions aren’t about adding complexity—they’re about organizing it in a way that makes everything more efficient.

“Complexity is your enemy. Any fool can make something complicated. It is hard to make something simple.”
(Branson, 2005)

By embracing clarity through structure, we pave the way for simplicity, resilience, and long-lasting value. It’s not easy, but when done right, it makes everything else easier.

Summary

Creating stable and effective processes is no small task. Many projects fail because they overlook the importance of focusing on stable functions rather than constantly shifting roles or individuals (Castro et al., 2020) (ShiftX, 2023). By anchoring your process models in the concept of Actors, you build a foundation that is flexible, scalable, and resilient to change. This approach not only improves efficiency and alignment but also creates processes that can withstand the test of time. The goal is not to avoid complexity, but to manage it intelligently, ensuring that your organization remains agile and effective, even in a rapidly changing environment.

While this article focuses specifically on the concept of Actors, it’s important to recognize that there are many other aspects and techniques involved in creating truly robust process models. Exploring these additional dimensions could be a topic for future articles, as understanding the full toolkit is key to achieving long-term success.

By integrating the Actor-based approach into your process management strategy, you lay the groundwork for sustainable growth and lasting organizational resilience. This method ensures that your processes remain adaptable, effective, and ready to meet the challenges of tomorrow, all while keeping complexity under control.

My top pro tips

By keeping these tips in mind, you can ensure that your process models are not just effective today, but for many years to come.

 

 

Business purpose vs. business value Finding a direction in a complex reality

2023-12-28, by Johan Hildingson (formerly Lagerström) - Type: Focused insight - Depth and reflection: High - Reading time: ~25 min

Background

In a business world characterized by shifting markets and endless possibilities, distinguishing between business purpose and true business value is crucial. However, this distinction is not always clear. Business strategy, tactics, goals, and purpose interact in a complex pyramid structure where boundaries are fluid and often subject to debate. This is where methods (e.g. goal modeling), established models (e.g. UML) and discussions (e.g. workshops) etc. become essential, acting as a compass in a world of relative values and multifaceted ambitions.

Business purpose vs Business value

Let's begin by exploring the definitions of "Business Purpose" and "Business Value". Further, these two words are stipulative definitions, meaning we as humans have assigned them a meaning (i.e. through a biased definition). Nonetheless, among the definitions that exist, the following is a summarized common description:

The exact delineation between the concepts of business purpose and business value is not always clear, possibly because it's challenging to entirely separate the meanings of the two terms. However, common to the definitions that exist is the following understanding:

(Digital Leadership, 2023) (Invensis Learning, 2023) (BVOP, 2023)


Below are some examples based on well-known companies:


In summary, while the business purpose provides the fundamental reason for a company's existence and guides its mission and values, business value represents the quantifiable and qualitative benefits that a company delivers to its stakeholders, reflecting its overall health and success.

The importance of a coherence

In every business context, there's a diversity of values, often leading to conflicts. A parallel can be drawn to how Quran burnings can lead to riots, illustrating how an action in one context can evoke strong and unpredictable reactions in another. This dynamic is equally relevant in the business world.

In "Existentialism is a Humanism", Jean-Paul Sartre emphasizes that there is no predetermined purpose for humanity, advocating instead that individuals have the responsibility and freedom to choose their own paths, thereby defining what it means to be human through their actions and decisions. Sartres view aligns with Antonovsky's "Sense of Coherence" (SOC) theory. Like Sartre's existentialism, SOC emphasizes the importance of comprehending, managing, and finding meaning in our environment, reinforcing the idea that personal understanding and choice are crucial in defining our existence. This perspective also resonates with the "Johari Window" model. This model highlights the value of open communication (i.e. in the "open window") in establishing common understanding, suggesting that our self-awareness and interactions with others are key in shaping our identity and understanding of the world.

Caption: Jean-Paul Sartre's "Existentialism is a Humanism" highlights existentialism's core principle of individual freedom and responsibility, emphasizing our role in shaping our lives and defining humanity through our choices. Notably, Sartre was awarded the Nobel Prize in Literature in 1964, which he famously declined.

Caption: The image depicts the SOC model. It proposes that we, as humans, need to have the three components to be able to feel a sense of coherence.

Caption: The image shows the "Johari Window". The model suggests that it is in the Open Area where the best communication occurs.

Complicated and complex - Choose your reality

Leadership plays a crucial role in navigating these complex waters. The contrast between strong individual leaders and collective community can be likened to influencers versus traditional TV channels. We choose what to follow and believe in, as somethings is too complicated to explain - that's why we choose based on our feelings.

In this context, the Cynefin (pronounced "kuh-nev-in") framework is relevant. The Cynefin framework is a conceptual framework used to facilitate decision making. It was created in 1999 by Dave Snowden, while working for IBM Global Services, and has been described as a "sense-making device". The framework emphasize the difference between complicated and complex environments. In a complex world, we can't always grasp all aspects; sometimes, we must simply accept certain elements as they are. 

Caption: Complicated things can be understood by humans through deduction. However, complex things cannot be fully understood, as they are highly advanced. For instance, we cannot always predict a tsunami, but they have devastating consequences. That is why the Cynefin framework emphasizes the importance of robustness and resilience for complex matters.

The complex world is also discussed in the theory called "the Munchausen trilemma". The theory presents three "deadlocks" in knowledge validation: circular reasoning, infinite regression, and dogmatism.

These frameworks, models, and theories all emphasize the importance of accepting complex things as they are, because we humans can't fully understand complex reality. This acceptance is crucial, not just in navigating the complexities of the business world but also in recognizing our cognitive limitations.

Caption: The character of Baron von Munchausen first gained fame in the late 18th century through books and comics, which were based on the real-life German baron’s outrageous and exaggerated stories. While the baron entertained people with these tales, such as riding a cannonball or pulling himself out of a swamp by his own hair, they were never meant to be taken seriously. The stories, first published in 1785, were entirely fictional. Over time, Baron von Munchausen's name has come to represent situations where fantasy and reality blur, such as in the Munchausen trilemma and Munchausen syndrome (a psychological disorder where individuals knowingly fabricate illnesses, usually to gain attention), reflecting how his tales were illusory fabrications rather than literal truth. (Encyclopaedia Britannica, 2023)

This understanding of complexity and the limitations in our knowledge resonates deeply with Thomas Kuhn's concept of paradigm shifts in The Structure of Scientific Revolutions (Kuhn, 1962). Kuhn’s theory illustrates that scientific progress is not linear but occurs through revolutionary changes in paradigms—frameworks that dictate the accepted norms and practices within a field. Similarly, businesses must recognize when existing paradigms no longer serve them and be prepared to undergo transformative shifts in thinking. This readiness to embrace new paradigms allows organizations to adapt and thrive in an ever-changing environment, much like how scientific communities evolve through paradigm shifts.

Our failure to fully grasp the complexity of a full reality, shaped by our cognitive limitations, manifests in a tendency to repeat historical mistakes. This cycle of repetition, particularly evident in the persistence of wars, highlights a profound challenge in human society. As discussed in "Global Affairs Explained": "Human nature has not changed. Although civilization has softened some aspects of the human condition... fighting and conflict are still natural ways for people to resolve their differences.". The article underlines the critical need for resilience and adaptability in leadership and societal structures. (GLA, 2020)

But what, then, is the meaning of it all, if we, as humans, cannot fully comprehend the complex reality and are doomed to repeat the same mistakes over and over again? This question leads us to crucial insights from Robert Sapolsky, an American neuroendocrinologist and author, and whom I consider to be one of the most intelligent and motivating individuals I am aware of. Reflecting on life's essence through the lens of dopamine, Robert Sapolsky once shared a thought-provoking insight:

Be very careful about what you strive for in life. What is realistic, and what are you willing to sacrifice to achieve it? Perhaps this is the key to understanding dopamine. It's about motivated anticipation. It's not about pleasure. It's not about the pursuit of happiness, but about the happiness in the pursuit.
(Robert Sapolsky, 2021)

Dopamine is one of the brain's most potent neurotransmitters. It activates our drive to accomplish tasks and experience rewards, motivating us in life. Sapolsky encapsulates the concept of a complex world, emphasizing that the journey often holds more value than the actual goal itself. This insight is especially pertinent in the business world, e.g. when considering the interplay between strategy and tactics. The business is a complex phenomena and in this context, each step taken towards a goal can be as crucial and meaningful as the goal itself - if not more.

An example of a complicated model for a complex reality

I was recently at a client meeting with a large insurance company, at the lunch break I discussed models with one of their actuaries. I mentioned that there are no complete models; they are merely simplifications of a complex reality - that's why they are called "models". The actuary quickly countered, citing mathematics as an example of a complete model. To illustrate my point, I brought up the Collatz Conjecture, demonstrating how even fundamental mathematical concepts can embody profound complexity.

The Collatz Conjecture is a mathematical puzzle that starts with any positive integer. If the number is even, it's halved; if odd, it's tripled and one is added. Repeating this process, the conjecture states that you will eventually reach the number 1, regardless of which number you start with.

This simple yet unsolved phenomenon, which cannot be fully explained by scientists, underscores the limitations of our mathematical models in capturing the complexities of reality. As we engage with such challenges to understand complexity, we humans fulfill our need to comprehend and find order, a pursuit that is inherently valuable. Our interpretations of the world are shaped by these models, reflecting our choice of perceived reality. 

This quest for knowledge and our desire to make sense of the world is evident in our reliance on models. In exploring puzzles like the Collatz Conjecture or phenomena in physics, we find purpose and a sense of belonging. Models such as Bohr's atomic theory, quantum mechanics, and string theory, each developed from a unique perspective, aim to simplify the complexities of reality but only capture a fraction of it. For example, Bohr's model laid the groundwork, quantum mechanics offered a deeper understanding, and string theory introduced the concept of one-dimensional "strings". Yet, all these models, despite their advancements, are incomplete, illustrating that our understanding of reality, influenced by our perceptions, is an ongoing approximation of a much broader and intricate reality.

In acknowledging that models are not reality but simplifications designed to make complex reality more comprehensible, we recognize their value in our endeavor to understand the world. These models, with their inherent limitations, remind us that our knowledge, while constantly expanding, is shaped by the simplifications we create. The models serve as a tool to help us understand reality a little better. So, does the simplification by the models diminish our drive? Personally, I don't think so. Instead, it motivates us, fueling our enthusiasm for life and prompting us to acknowledge the inherent limitations in our representations of reality.

Caption: The Collatz Conjecture proposes a sequence where any positive integer is eventually reduced to 1, highlighting the complexity hidden within simple mathematical rules.

Exploring the depths of mathematical paradoxes

One might think 0.3333... × 3 should equal 0.9999..., which seems different from 1. This might lead one to believe that 0.9999... is infinitely close to 1 but not quite equal to it. However, let's break it down mathematically:

Therefore, 0.9999... = 1

To further illustrate, consider the division: 0.3333... / 0.9999... = 1/3 This reinforces that 0.3333... multiplied by 3 equals 1, confirming that 0.9999... is indeed 1. (Tao, 2006)

The equivalence of 0.9999... and 1 shows how different representations can lead to the same value. Decimal representations can be misleading, but mathematically, 0.9999... is exactly 1. This reflects how infinite series operate and challenges our intuitive understanding. (Jones, 2018)

Mathematics, as a formal system, relies on axioms and derivation rules. A key insight into the limits of such systems comes from Gödel's incompleteness theorems, which demonstrate that in any sufficiently powerful formal system, there will always be true statements that cannot be proven within the system itself. Gödel’s work, first introduced in 1931, fundamentally challenged the belief that mathematics could be a complete and consistent system. This highlights not only the inherent complexity in mathematical theories but also the limitations of even the most rigorous logical frameworks. (Gödel, 1931)

Caption: The paradoxes in mathematics, such as the Banach-Tarski Paradox, the Monty Hall Problem, and the concept of 0.9999... equaling 1, illustrate the intricate complexity within seemingly simple mathematical principles and challenge our understanding of reality.

Mathematical models are abstractions, not reality itself. When a model appears flawed, it often means the model needs refinement or our understanding has reached its limits. The statement 0.9999... = 1 underscores how mathematics uses limits and infinities to represent numbers accurately, emphasizing the necessity of understanding formal definitions to avoid misconceptions (Tao, 2006).

This intricate yet precise nature of mathematical proofs and representations reveals the complexity within our complicated models of a complex reality. Mathematics, while powerful, is an evolving tool that models but does not equate to reality itself. This reminds us that sometimes, we must accept the limits of our understanding.

The complex phenomenon of the coherence "Business"

What does this mean for the business world? Well, it means that there is no absolute right or wrong way to define a company's purpose or value. It's about the choices we make within the frameworks in which we operate. The classic problem of distinguishing between purpose and goal, strategy and tactic, is less about their objective definitions and more about the subjective interpretations and choices made within an organization. The important thing is not what these elements are in themselves, but rather how they are perceived and how they interact to create a common purpose that adds value. A sense of coherence in a complex phenomenon.

This challenge is also reflected in the distinction between concepts like vision and mission, as well as frameworks like Simon Sinek’s "Why, How, and What". Sinek emphasizes that starting with "Why" drives purpose and engagement, but others might propose different orders or interpretations. (Sinek, 2009)

Therefore, it's important to define the purpose based on the value you want to create, making it comprehensible, manageable, and meaningful for all involved. This creates a sense of coherence - essential for all successful businesses. The Munchausen trilemma illustrates the challenges we face in this process, but it's also a reminder of the importance of accepting that some things cannot be "solved" in a traditional way.

Finally, it's important that we as individuals and as organizations acknowledge that our success is not solely defined by external circumstances or concrete goals. It's a continuous process of self-reflection, adaptation, and development. By focusing on our inner value and purpose, we can create a meaningful and sustainable path forward, both for ourselves and for the organizations we are part of.

Embracing the Journey: Extracting Business Insights from "The Boy, the Mole, the Fox, and the Horse"

In Charlie Mackesy's "The Boy, the Mole, the Fox, and the Horse", a profound narrative unfolds within a mysterious forest, where a young boy embarks on an extraordinary journey alongside a wise horse, a curious mole, and a kind-hearted fox. As they navigate through the forest's challenges, the boy grapples with uncertainties about the path ahead.

The transformative moment in this tale arises when, feeling overwhelmed and lost, the boy turns to the horse for guidance. With wisdom and compassion, the horse imparts a valuable lesson:

"Can you see the next step? If you can, then take it."

This statement encourages the boy to shift his focus from the entirety of the unknown journey or the distant destination to the immediate next step. It underscores the courage required to take that step, even when the path ahead seems unclear.

In the business context, where organizations frequently encounter unpredictable challenges and opportunities, this message resonates profoundly. It encourages professionals to shift their perspective and understand that genuine business value isn't exclusively attained by achieving distant objectives or striving to become something they are not. It also involves appreciating and finding value in their present circumstances while focusing on each step of the journey. The forest, symbolizing the ever-evolving business landscape, parallels the experiences of individuals and organizations navigating the intricacies of the corporate world, characterized by moments of uncertainty, wonder, and exploration.

Summary

So, what can we learn from this? Perhaps it's that the relationship between business purpose and true business value, while often viewed as distinct, are actually deeply intertwined. These concepts, shaped by the choices and interpretations within an organization, complement each other in a nuanced interplay. Purpose steers a company's direction, shaping the type of value it aims to create. Yet, the path towards clear goals and purposes is often meandering and influenced by our perceptions. 

Embracing these fluctuations, challenges, and shifts is essential for fostering growth, learning, and reevaluation. Ultimately, success in the business world hinges on understanding that it's not just about achieving external milestones, but also about nurturing an internal sense of coherence, adaptability, and sustainable development that aligns purpose with value.  And, achieving enduring and meaningful business success hinges on seamlessly integrating purpose and value, recognizing their intrinsic interdependence, while humbly acknowledging the inherent complexity of the reality. 

As we navigate this intricate landscape, it often becomes clear that the journey itself is where we find the profound essence of purpose and value. This realization brings to light that, in many cases, the path we tread is even more valuable than the destination we aim for. It's on this journey that we uncover lessons, insights, opportunities, and transformations that are indispensable. These experiences remind us that the process is just as important, if not more so, than the end goal. Perhaps, in this revelation, we discover that the true purpose is embedded not just in reaching our destination (i.e. goals and values), but also in the journey towards it.

My top pro tips

 

 

Stress – Only evil and bad?

2023-04-05, by Johan Hildingson (formerly Lagerström) - Type: Focused insight - Depth and reflection: Medium - Reading time: ~10 min

Stress is part of people's everyday lives today. Important and crucial decisions that have to be made, life puzzles that have to be put together, means of transport that are delayed, the presentation tomorrow, what to eat for the weekend and much more... But what is stress, how does it affect us and is all kinds of stress bad? In this article we explore the function of stress for us humans.

The frontal lobes – Consciousness, coherence and rational thinking

The human is descended from the primates. What sets humans apart from the primates is spelled: homo sapiens sapiens – i.e. the specie who is aware of that that she thinks. Humans have a consciousness; she is aware that she is thinking. This consciousness is created in the frontal lobes of the brain. (Hansen et. al., 2022)

The frontal lobes are part of the cerebral cortex and are located behind the frontal bone. They are what enable us to plan for the future, as well as control our impulses when we perceive that there is a future reward to be had (and by that also our pleasure patterns). This is where we get an overview and a perspective of things. (Phillips, 2022)

The frontal lobes aren't fully developed until the age of 20-25. This explains why impulse control is not fully developed amongst younger people. Compassion, empathy and meaningfulness are also qualities that depend on the frontal lobes being well integrated. It is the frontal lobes that create a sense of meaningful coherence. That's why it's important for humans to feel a coherence. (Antonovsky, 1990) (Hansen et. al., 2022)

The coherence is so important that people even become stressed when the context and coherence are missing. As a primate (10,000 years ago) it was dangerous to be alone, you did not have the protection of the herd. Even today, this mechanism still exists. This is why the frontal lobes are extra sensitive to stress. (Hansen et. al., 2022)

Cortisol – Stress and getting ready to fight or flee

When we become stressed, cortisol is secreted from the adrenal glands, which triggers the release of a large amount of glucose. The glucose is energy that are used used in order to deal with the stressful situation. Adrenaline and nor-adrenaline are also secreted during stress. The adrenaline increases the heart rate so that more blood circulates and makes the respiratory tract to relax so that we can breathe in more oxygen. Sweat is secreted so that the warm muscles can cool down and function well. The nor-adrenaline makes the cognitive functions prioritize focus and quick thinking, instead of the more rational and logical thinking of the frontal lobes. In summary: the body gets ready to fight or flee as action is more important than logical thinking. (Phillips, 2022)

Maybe you have felt thirsty when you get stressed? This is because the palate receives less blood and cannot produce saliva as well. Nausea may occur as the body wants to get rid of stomach contents, because we run better on an empty stomach. You get tired because it takes a lot of energy to be on constant alert. This is also why long-term stress makes the body prioritize other vital functions. Digesting food becomes less important (which creates stomach problems), sleep is not a priority, etc. (Phillips, 2022)

A stressful situation creates several signal substances that directly affect the body, but what then causes the body to perceive a situation as stressful?

If you point in towards the head from the top of the ears and straight in from the eyes, the lines meet exactly where the amygdala is located. The amygdala is right at the center of many of our sensory impressions. Maybe it's no coincidence that the amygdala is located there... The amygdala is kind of the body's fire alarm. It takes in sensory input and looks for threats. It works spontaneously and is close to all impressions (sight, hearing, smell, taste, etc.). The amygdala can even sound the alarm before we process the information to the frontal lobe and become aware of the threat, in other words: we act before we become aware. There's a good Dutch saying: "You hear the alarm, but you don't know where the bell is." (>>>). The amygdala controls the more primitive parts of the brain and makes us think instinctively, quickly and decisively. (Hansen et. al., 2022)

So how do you make good decisions in stressful situations?

It is not uncommon for us humans to make decisions under pressure. In emergency healthcare this is everyday life. In emergency healthcare a lot of work is done to enable rational thinking during stressful situations. Some of the methods used there are:


A lot of stress management focus on making yourself aware of that you are stressed and that it can affect your rational thinking and therefore decision-making. With the awareness that you are stressed, you can also give yourself time to relieve the stress and act more rationally. If you know that you are in a stressful situation, you should also take in more perspectives, to compensate for your narrower and less rational thinking.

The feeling of being in control of the stress is especially important. Studies show that if a subject is forewarned of an electric shock, the electric shock hurts less. The person does not need to tense up unnecessarily and feels safer and can adapt. In healthcare, this is handled, among other things, by notifying the emergency hospitals of incoming patients, so that the staff have time to prepare and become aware of what is to come. Communication in the stressful situation also helps, as it creates a sense of joint control of the situation. (Mental health foundation, 2020) (Hansen et. al., 2022)

Stress can be controlled if you practice it, but most scientist agree that it must be done situation by situation - this since stress is the perception of not having control over a specific situation. In fact, the thought of a stressful situation has the same effect as actually being in a stressful situation, this as the amygdala reacts to the parts of the brain that are activated by the thought of a stressful situation. (Hansen et. al., 2022) (Phillips, 2022)

Breathing exercises are effective during a stressful situation. By controlled breathing you reduce cortisol secretion and instead increase serotonin and oxytocin – signaling substances that create the feeling of coherence, control and satisfaction. In fact, in cases of stress the body releases oxytocin after a while, to create the calming effect after the stress. Just the feeling that the stress is an experience that will naturally pass can be calming. (Antonovsky, 1990) (Phillips, 2022)

Also enabling the body do produce dopamine can decrease the cortisol secretion. Dopamine is what motivates us humans to start doing something, e.g. start reading a book, start writing a report or go for a walk - or even better: hit the gym. Dopamine is the body's reward system that makes us want to do something and keep doing it. Dopamine creates more dopamine, so just by starting more motivation will come - in science it's called "momentum of dopamine". (Field et. al., 2015) (Phillips, 2022)

In a stressful situation you can also break down the challenge you are facing into smaller components. The smaller components provide motivation as they feel comprehensible, manageable and meaningful (i.e. "a sense of coherence"). Motivation gets us started and going (i.e. momentum). In addition, the breakdown makes us feel that we are in control of the situation, it may not be as dangerous as our amygdala wants us to think. (Antonovsky, 1990) (Phillips, 2022)

Summary

Cortisol is often called the hormone of death, but that is not entirely fair. Without cortisol, life would be dull and gray. We don't hate stress, we just hate the wrong kind of stress. In fact, we even pay for good stress, such as riding a roller coaster or watching crime series. Stress is good when it is adequate, transitory and when we feel that we have control – in those cases the stress even contributes to euphoria (i.e. endorphins).

Stress makes us focus more, become actionable and gives us the opportunity to feel upcoming reward. It gets us going and ready for action, which can create momentum. Our cortisol levels are high in the morning, because it gets us started and take on the wonderful day.

The important thing is to create healthy stress that motivates and engages us, and minimize stress that makes us act less and less rationally or inclusively. By tapping into this motivation, we open ourselves to new experiences, excitement, challenges, and continuous learning. Stress is not always bad, it's a part of being human and can (!) be vital and good (i.e. in the right doses and situations).

My top pro tips

 

 

The Organizational needs ladder - How to understand the phases of an organization 

2022-08-10, by Johan Hildingson (formerly Lagerström) - Type: Focused insight - Depth and reflection: Medium - Reading time: ~10 min

Background

Maslow's hierarchy of needs (Maslow, 1943) is a theory of motivation which states that five categories of human needs dictate an individual's behavior. The theory was published 1943 under the title "A Theory of Human Motivation" in the journal Psychological Review. 

Today the model is often used when describing the current state of humans in different society contexts. The hierarchy of needs is a psychological idea and also an assessment tool, particularly used in education, healthcare and social work (Poston, 2009). The hierarchy is also a popular framework in sociology research, including management training and higher education (Freitas et. al., 2011). Even though psychology isn't a science subject, this model is well-established and widely accepted.

The Organizational needs ladder

In the model below, which I call the "Organizational needs ladder", I have interpreted Maslow's hierarchy of needs and translated it into the corporate world. The purpose of this model is to describe the typical phases an organization can go through. I often use the model when I quickly try to familiarize myself with an organization and its situation, and by doing so, roughly understand what their needs may be. It also gives me a hint of what challenges the organization faces and what they want to strive for and move towards.

When you are about to shop at your grocery store, you probably write a shopping list (a todo list) and you say "I have an errand in town". But the shopping list is not the valuable thing, you can write it on a post-it, you can write in a notes app of your mobile phone, or you can memorize it... The real value is what the written words means (i.e. the information) and that you buy it (i.e. process and actors), with the goal of being able cook dinner at home (i.e. goals) and by that fulfilling the purpose of being able to survive (i.e. the purpose). If you were to say to your partner that "I have an errand" and wave the note, she/he may be annoyed...

- Well, what errand?!
- Yes, an errand!
- Yeah?!

Instead, you probably usually say something like...
- I was thinking of buying food for tonight at the grocery store, I was thinking Swedish meatballs - what do you think? Do we need anything else?

So, in our private life we are often (not always!) at step 4 or 5, trying to fulfill ourselves in a coherence and take care of our joint values.

Summary

In closing, in this article I try to put forward the idea that organizations may progress much like individuals, evolving from focusing on basic survival to ultimately contributing to society. This concept invites reflection on the broader role of businesses in our communities. How does your organization, or one you're familiar with, navigate this journey? Where does it currently stand on this "ladder", and what steps could it take towards greater societal impact? Your insights and experiences are valuable in enriching this discussion and understanding the diverse paths organizations take in their quest for growth and purpose. Consider sharing your thoughts and observations with others, fostering a wider dialogue about the transformative journey of organizations.

My top pro tips

Bonus - The consultant ladder

And yes... Of course, I have a model that explains the consulting world as well. After all, I've been working as a consultant for 20 years. This article introduces the Trust-Driven Consultant Ladder, a conceptual framework drawing upon Maslow's Hierarchy of Needs and the insights of David H. Maister, Charles H. Green, and Robert M. Galford in "The Trusted Advisor" (Maslow, 1943) (Maister, Green, & Galford, 2000). The model synthesizes these profound insights with my two decades of professional experience, offering a unique perspective on the evolution of client-consultant relationships.



The Consultant Ladder", informed by insights from "The trusted advisor" and my own consulting experiences, is designed to offer guidance and reflection in the consulting field. It integrates essential aspects such as credibility, reliability, intimacy, and a balanced self-orientation, presenting them as key components for a consultant's journey rather than strict rules.


By sharing this ladder I hope to contribute to the broader dialogue in the consulting industry. This model is a personal narrative, combining foundational trust principles with practical experiences, and is shared with the aspiration of encouraging others in the field to find their unique paths and create significant, positive change in their professional and broader community engagements. 

And remember... The true measure of any model's worth is its ability to resonate with and enrich your personal experiences and aspirations. Ultimately, it's about discovering your unique contribution, that intersection where your skills and passions align with the world's needs (i.e. "Ikigai") - a powerful insight that can redefine not just your career, but your impact on the world around you.

 

 

The Corporate triangle - Navigating perspectives and why people prefer improvements over change

2022-07-22, by Johan Hildingson (formerly Lagerström) - Type: Focused insight - Depth and reflection: High - Reading time: ~15 min

Introduction

It's often said that people of a business are the business itself. The problem with that statement is that people are individuals that need a coherence. According to Dunbar (Dunbar, 1992) a human can handle a coherence of maximum 150 relations. This implies that the number of perceptions of the world is as many as the people living in it. Therefore, there isn't one world, there are many. 

In this article, we delve into the complex interplay of individual perspectives within the corporate world, and we explore how these varied viewpoints shape the business landscape. 

The reality of diverse perspectives

In science the philosophical discussion of what is true science and what isn't (i.e. pseudo-science) is in fact a part of being a scientist. In each research the scientist defines the problem she wants to investigate and then operationalize it. The operationalization implies that you as a scientist have to define the problem in measurable terms. 

For example, you as a scientist want to understand how many people in the world that have access to clean water. In order to research this, you as a scientist need to define what e.g. "clean", "access" and "water" is. One scientist may say it's 3 liters a day of water from a local well that doesn't cause illness within 7 days. Another scientist may say the access to water also includes the water we get from eating food. A third scientist may say it's the ability to take a bath in a river within a walk of 10 km.

It is the scientist that decides how to operationalize the problem definition, with her perception and knowledge of the world and the hypothesis of the problem she is interested in. She can't know everything, that's why she has to scope it by operationalizing it by her hypothesis and means.

Is this a problem that we humans can't perceive the full facts? No, according to Richard Haier (professor, scientist and psychologist at Irvine School of Medicine) the worst thing that can happen is that you prove that your hypothesis is wrong. And if you're biased and your results aren't fully true, then future studies will show other results than yours. A failure is just an opportunity to begin again more intelligently. The fact is that the results are just simplified versions of the world/reality, they are models. Models are simplifications of the reality so that we humans can understand it a bit better. So, the models aren't the reality. (See also the article above, regarding business purpose and business value).

In line with this idea, Alfred Korzybski famously articulated the concept that "the map is not the territory" (Korzybski, 1933). This principle reminds us that our representations of reality—be they business models, process diagrams, or strategic frameworks—are inherently limited. They serve as abstractions that allow us to navigate complex realities, but they are never fully comprehensive. While maps, both literal and figurative, help us understand and act within our environment, they are merely tools. The reality they attempt to represent is always richer and more complex than the model itself. By keeping this in mind, businesses can remain adaptable and avoid the pitfalls of over-reliance on any single model or strategy.

The exploration of diverse perspectives in science, particularly the philosophical debate around true science versus pseudo-science, is a crucial element of being a scientist.

Caption: Multiple perspectives may each hold a fragment of truth, offering valid insights within their scope yet representing only a piece of the larger and complex reality. Our understanding is shaped by these perspectives, which, like puzzle pieces, create a complex mosaic of the corporate world and beyond, inviting us to seek a more holistic comprehension. The model is inspired by discussions on relativism and perception theory, often explored in philosophy and cognitive science. This visual metaphor is commonly referenced in contexts exploring subjectivity, truth, and perspective, including works like "The Structure of Scientific Revolutions" (Kuhn, 1962) and "The Interpretation of Cultures" (Geertz, 1973).

Implications for business

In business, similar to science, we must recognize that individuals have diverse perceptions of a context. A business exists both as an entity and as a multitude of perceptions shaped by the coherence of these perspectives.  There is a "business" as well as there are several perceptions of it, and it depends of the coherence. 

A business strategy from one coherence (e.g. the vision of the board) isn't always the same thing as the culture (i.e. a group of people and their actions). And the culture may vary depending on the individual people in it, in fact – some people may not be a part of one "culture". And all these factors together result in how our business execution is working.

Caption: It's not always that people in a company are a part of a company culture. And it's not always that the culture is aligned with the company strategy.

So, in a business we have to be humble to that there are many perceptions of what our business is. One perception doesn't need to be more "correct" than the other, they just exist and are. It is by continuous work, communication (i.e. inclusion) and improvements we set a common direction and create a coherence. When individuals are included in the decision-making process, they have the opportunity to contribute their unique perspectives, thus becoming integral contributors to valuable improvements. This collaborative approach not only enhances the quality of the changes implemented but also ensures a more inclusive and representative outcome, resonating with a broader range of experiences and insights within the organization. Because in the end: people don't like change, they like improvements.

This understanding aligns with the reality of diverse perspectives, which is fundamental in both science and business. Embracing these diverse viewpoints is key to advancing our knowledge and achieving success, demonstrating the significance of multiple perspectives in understanding and navigating the complexities of the world. (See more about this in the article about business purpose and value)

Layers of human coherences - Understanding the complexity of individual perspectives

Caption: People are individuals in different levels of context.

Another way of looking at the phenomenon is to understand that in each given context, humans are involved in different degrees of human contexts. People themselves have a context. Everyone is an individual and each individual has their specific context. (Antonovsky, 1990) 

Adam likes sailing, Frank likes cycling. The individual is part of a larger context than just himself, in a group of people - a team. Team Alfa is interested in AI, team Beta is interested in football and Chelsy league. And the team is a part of a context that is bigger than just the team. Team Alfa is part of a development organization at a company, team Beta is part of a football fan club. And you can extend this view of different degrees of context all the way up to e.g. context of a society or even human kind.

“Coming together is a beginning. Keeping together is progress. Working together is success. If everyone is moving forward together, then success takes care of itself.”
(Henry Ford, 1903)

What can we learn from this? People have different contexts and that the contexts exist at different levels. When we try to solve a problem at the company level, we must understand that teams and individuals are some of the context that must be included and taken into account. And to be sure that the problem the company tries to solve is a problem worth spending time on, we need to ensure that solving problem brings value to different levels of contexts. This enables the individuals to become part of the company's change executed by the teams.

Antonovsky's concept of Sense of Coherence (SOC) highlights the importance of cohesiveness within these contexts. SOC is not an individual attribute but a group phenomenon, exemplified by the various groups within a company.

The crucial interplay - Understanding perception of perspective

So, each person has their unique perception of reality, shaping the business environment with a mosaic of perceptions. But how do these insights extend beyond the corporate realm? To answer this question, let's examine an intriguing interview conducted by Lex Friedman, shedding light on the significance of perception and perspective in leadership, teamwork, and even espionage. In a compelling interview from 2020, Lex Friedman spoke with Jason Hanson, a former CIA officer who shared invaluable insights from the world of espionage. During this interview, Hanson conveyed a critical lesson applicable not only to spies but also to leaders and team members – the differentiation between perception and perspective.

Hanson explained that perception is an individual's personal viewpoint and understanding of a situation, while perspective encompasses the ability to understand and consider others' perceptions as well as one's own. This understanding is foundational in effective espionage, enabling spies to navigate complex scenarios, anticipate potential pitfalls, and maintain credibility and trust in their covert operations.

Crucially, Hanson emphasized that this perspective-perception dynamic reaches beyond espionage. It holds significant implications for leadership and collaboration. Leaders who are mindful of how their actions and decisions are perceived by their teams and organizations can cultivate trust, facilitate effective communication, and foster productive teamwork. This awareness empowers leaders to make informed choices that resonate positively with their colleagues, leading to better outcomes and stronger relationships. Hanson emphasizes the importance of both perception and perspective in becoming not only a skilled spy but also a proficient and empathetic colleague and leader.

Caption: Human beings cannot grasp the full extent of reality; we possess a perception of what we observe. However, even this perception may not align with the impartial facts of reality. In the checkerboard image, squares labeled "A" and "B" seem to be of different shades because of the shadow cast by another object, yet they are indeed the same color. This illusion, known as the Checkerboard Illusion, was highlighted by Edward H. Adelson in the 1990s and swiftly became a pivotal example in the study of visual perception. It was widely published and discussed, particularly in academic and psychological circles. In the image our perception is deceived by the chess square's surroundings and our preconceived notions about how the square should appear.

Caption: In the image above is yet another example of our perception being misled; two squares seem to differ in color because of surrounding visual cues, when they are in fact the same. Don't believe me? Cover the middle of the cube with your fingers, and you'll see. It's a vivid demonstration of how context shapes our perception, offering a glimpse into the subjective nature of our view of reality. 

The images above illustrate that our perception of reality is not only shaped by our experiences, but also influenced by our senses (i.e. sight, hearing, smell, taste, and touch). As humans, we assimilate these diverse sensory inputs and experiences to form our understanding of the world. Is this notion disconcerting? Well, maybe not... I would say that this is the beauty of being human - we do not apprehend the complete complexity of reality, but rather the biased portion of reality that we perceive. This leaves us with the understanding that there is always another perspective to explore.

Is there a "correct perspective"?

So let's engage in a bit of philosophical pondering within this domain... The concept of perspective is a fundamental aspect of human perception and understanding of reality. In this article we have explored the intricate interplay of diverse perspectives within the corporate world and beyond. It becomes apparent that there is no single "correct" perspective when it comes to comprehending the complexities of our reality. But maybe, the more perspectives we consider, the closer we may come to a little bit more comprehensive understanding of reality. (Hansen, 2023)

In scientific research, this multiplicity of perspectives plays a central role. Researchers spend a significant amount of their time reading reports and articles within their respective fields. Why? Well, the primary goal is to gather a multitude of perspectives to contribute to a broader and more nuanced understanding of the chosen subject matter. However, it's crucial to recognize that even the choice of the specific subject matter (and the data and understanding you collect) is inherently biased and part of a particular perspective. This realization leads us to a profound observation taught in higher education and science theory: all research can be perceived as somewhat pseudoscientific. (KTH, 2017)

Consider the varying attitudes toward natural medicine across cultures. In some societies, herbal remedies and natural treatments are regarded as scientifically validated methods of healing, deeply rooted in tradition and supported by local research. In other cultures, however, these same practices may be viewed with skepticism, seen more as pseudoscience than legitimate medicine. This divergence illustrates how our context and cultural background shape our understanding of what constitutes "scientifically proven" knowledge.  Historically, scientific consensus has often shifted. For instance, the once widely accepted belief that the Earth was flat is a prime example of how scientific 'facts' can change over time. Current scientific debates, like those surrounding climate change or nutrition science, further showcase this plurality of perspectives. Even within a shared field of study, researchers may arrive at different conclusions, underscoring the multifaceted nature of scientific inquiry. Therefore no perspective is universally "correct"; they are shaped by the subjectively chosen context and the limited prevailing understanding of the time. (IPCC, 2019) (KTH, 2017)

As Steven Pinker notes, "We are capable of exploring many different kinds of ideas, and among those ideas are the solutions to our problems". This exploration is pivotal in understanding the multifaceted nature of knowledge. Michael Gazzaniga also emphasizes our narrative nature, "We are a story-based creature, constantly constructing narratives". Our perspectives are the stories we create, evolving with new information and insights.

The existence of reality itself is a matter of perspective. While we define reality within our human terms, the truth is that reality simply "is", indifferent to our categorizations of real or unreal. This concept is illustrated by the idea that understanding our current dimension might require experiencing the next. For instance, an ant on a leaf is unaware of the world beyond, just as humans, with our limited perceptions, cannot grasp the entirety of 'reality'. Those who have experienced spiritual encounters might argue they've glimpsed another dimension, reshaping their understanding of reality and humanity's role in it. (Hansen, 2023) (Harper, 2015)

In conclusion, probably there isn't a singular "right" perspective. Perspectives exist within their contexts and are shaped by individual subjective starting points. What's essential is finding value in relevant (i.e. subjective) perspectives and a sense of coherence in them, e.g. in a business. It's through diverse perspectives that we engage in meaningful discussions, enhancing our collective understanding. The goal isn't to converge on a single truth, but to find valuable and meaningful coherence (e.g. for our business) in the myriad viewpoints that make up our complex reality - that's where you find your subjectively "correct" perspective. (Harari, 2017)

Summary

In this article we have delved into the multifaceted nature of individual perspectives within the business environment. We see how each person in an organization contributes their own unique perspective, creating a complex and varied landscape of perceptions that influence business dynamics. The concept of scientific operationalization serves as a notable illustration, demonstrating how different interpretations can have a significant impact on our approach to problem-solving. This exploration underlines the importance of recognizing and valuing diverse perspectives, as each provides essential insights that contribute to the overall understanding and success of the business. 

What can we learn from this exploration then? Fundamentally, it's the crucial importance of acknowledging and embracing these diverse perspectives. In the realm of business, strategy and culture might not always be perfectly aligned due to these individual differences. Yet, by fostering inclusive communication and actively involving people in the process of change, we can shift from merely imposing change to genuinely facilitating meaningful improvements. This approach reframes change as an opportunity, not a hurdle.

In drawing conclusions, it appears beneficial to emphasize empathy, understanding, and inclusivity in the business sector. Recognizing and valuing the variety of individual differences could lead to a more unified and dynamic environment, enhancing both business dynamics and workplace harmony.

My top pro tips

 

 

Data governance - To see data as a valuable asset

2022-01-12, by Johan Hildingson (formerly Lagerström) - Type: Essentials - Depth and reflection: Low - Reading time: ~5 min

There are many different definitions of what DG (data governance) is, but the common goal of among all definitions (regarding governance, management and ownership) is:

"Using data to better manage the company's operations"

This is mainly done by defining and manage policies, processes (routines) and systems in order to ensure that people have safe access to high quality, correct and valuable information. Information that they need in order to make good business decisions and to lead the company towards success. Furthermore, this implies that DG controls how people in the company use data and technology, to add value to the company and its operations.

Caption: Summary of DG aspects and deliverables.

DG is thus not an IT-only function. It is an operational responsibility that requires cross-functional cooperation and stewardship. In other words: people and ownership, processes and policies / requirements. IT solutions is often needed to enable compliance/controls.

Summary of requirement deliverables of DG:


Caption: Summary of DG aspects, requirement deliveries and business context.

What about the term Data management (DM) then? DM is often interpreted as the same thing as DG. Data Governance (DG) and Data Management (DM) are intertwined yet distinct concepts in handling data within an organization, each serving specific roles:



In summary, DG sets the strategic framework and requirements for data handling. DG revolves around policies, regulations, and oversight of data usage, focusing on aspects like data ownership and compliance. DM is the technical execution that ensures these requirements are met by focusing on the practical handling and maintenance of data. DG defines the what, why, and who of data handling, and DM is about how these are technically implemented. Both are critical for maintaining the integrity and efficacy of data within an organization.

Summary

Data Governance (DG) is essential for managing a company's operations using data as a key asset. It involves defining and managing policies, processes, and systems to ensure access to high-quality, relevant, and valuable information for sound business decisions. DG isn't just an IT function; it requires cross-functional collaboration and ownership, encompassing people, processes, and IT solutions. DG sets the organizational framework for the entire data lifecycle, while Data Management (DM) handles the technical implementation. Effective DG necessitates ongoing communication, education, and adherence to set rules and processes. It's crucial to continuously update DG practices in response to new data, laws, and business changes, recognizing data as a central and significant asset.

So in summary... DG is about understanding the goals, requirements and processes around the data and its use. In BD (business development), this way of looking at needs is not new. What is new is the context (including the requirements, solutions and processes) this entails; the context of seeing data as an asset.

My top pro tips