I have modified this model to apply to human systems (See Figure 1). The four quadrants describe:

A Whole System Approach to Cultural Transformation Richard Barrett, Managing Partner of Richard Barrett & Associates This paper is an extract from the book, A Whole System Approach to Cultural Transformation: Building a Values-Driven Organisation to be published 2005/2006. There are two models at the heart of the Whole System Approach to Cultural Transformation: a modified version of Ken Wilber s Integral (Four-Quadrant Matrix) model and the Seven Levels of Consciousness model. The Seven Levels of Consciousness model is described in Liberating the Corporate Soul: Building a Visionary Organization. i The Integral model is described in A Brief History of Everything. ii Other models and techniques that support the process of whole system change include Appreciative Inquiry, Spiral Dynamics, and Resilience Building. The Integral Model The integral model is represented by a four-quadrant matrix, comprised of the internal of the individual, the internal of the collective, the external of the individual and the external of the collective. All knowledge can be subdivided into these four quadrants. I have modified this model to apply to human systems (See Figure 1). The four quadrants describe: What is going on within the internal of the individual as exemplified by the individual s personality. What is going on within the internal of the collective as exemplified by the collective culture. What actions and behaviours the individual is displaying as exemplified by the individual s character; and What actions and behaviours the collective is displaying as exemplified by the rules, laws, and societal structures. The internal dimension is the realm of the mind and its motivations the values, beliefs and thoughts that comprise the personality of the individual, and the values and beliefs that comprise the culture of the collective. This is the realm of consciousness. What is internal cannot be seen or observed; it can only be deduced by observing behaviours.

Figure1: Human Systems Four Quadrants Values Personal Integrity Walk the Talk Behaviors Individual Personality Character Individual values and beliefs Individual actions and behaviors Personal Alignment Values Alignment Mission Alignment Collective Structural Alignment Culture Social Structures Group values and beliefs Group actions and behaviors Group Cohesion Enhanced Capacity for Collective Action The external dimension is the realm of the action and behaviour. Actions and behaviours are driven by the conscious or subconscious motivations of an individual or a group, and their motivations are driven by their perceived needs. Thus, all values and behaviours are related to needs, and all needs are related to specific levels of consciousness. What is external is the outward manifestation of the internal and can be seen or observed. When there is concordance between the stated values and beliefs of an individual or group, and the actions and behaviours of the individual or group, there is authenticity and integrity. Where there is authenticity and integrity, there is a solid foundation for trust. We call this walking the talk because as outside observers the only way we know what is going on internally is by what people tell us. If the actions and behaviours of individuals or groups are in alignment with the values and beliefs that they tell us they espouse, then we consider this person or group to operate with authenticity or integrity. When the actions and behaviours of individuals or groups are not in concordance, there is a lack of authenticity and integrity and there is no foundation for trust. For the purposes of explaining the concept of whole system change, I propose the following definitions. Personal Alignment: The alignment of an individual s values and beliefs with their actions and behaviours Structural Alignment: The alignment of a group s values and beliefs with their actions and behaviours as codified in the collective rules, laws, and processes of governance. Values Alignment: The alignment of an individual s values with the group s values.

Mission Alignment: The alignment of an individual s sense of purpose or mission and the group s stated purpose or mission. Figure 1 shows how these four types of alignment are superimposed on the four-quadrant matrix, where the internal dimensions are represented by values and beliefs and the external dimensions are represented by actions and behaviours. For whole system change to occur, there must be a parallel shift in personal alignment, structural alignment, values alignment and mission alignment. All four relationships must change in the same direction for the group to experience a shift in consciousness. When all four relationships change in the same direction, then the group finds a new level of internal stability and external equilibrium at a higher level of consciousness. The way we bring about such a change in an organisation is through specific workshops and programs that focus on personal alignment and group cohesion (values alignment and mission alignment), and structural alignment changes to the rules, regulations, systems, processes and structures of governance that reflect the values and behaviours of the new level of consciousness. Mistakes are often made in cultural transformation programs because these four quadrant interactions are not well understood. Mistake # 1: Many organisations focus on personal alignment without doing anything about the structural alignment. This serves only to aggravate the situation. Managers and employees, who have experienced a personal alignment program, shift to a higher level of personal consciousness, while the rules, regulations and systems and processes of the organisation still reflect the old level of consciousness. This increases the level of frustration among employees. Mistake # 2: Another frequent mistake is focusing on group cohesion (team building), without first carrying out a personal alignment program. This limits the potential for success of the group cohesion program because people enter these programs without self-understanding or strong interpersonal skills. We want employees to come into a group cohesion program already having experienced a personal shift in consciousness. Therefore, for maximum impact, personal alignment must precede group cohesion, and structural alignment must either precede personal alignment or be implemented in parallel. When this happens organisations can shift smoothly to a new level of consciousness. Mistake # 3: The most frequent mistake is when an off-the-shelf personal alignment, or group cohesion program is used, assuming it will do the trick. All personal alignment and group cohesion programs need to be customized to the client situation for the optimum results. Cookie-cutter personal alignment or team-building programs are potential recipes for failure. The personal alignment and group cohesion programs need to be specifically tailored so they correspond to the belief structures, levels of consciousness and values of the group. The Seven Levels Model and Spiral Dynamics provide the necessary insights to design such programs. The values assessment instrument, described in the previous chapter, can tell you exactly where the group is and where it wants to go in terms of its motivations. The assessment instruments used in Spiral Dynamics can tell you where a group is with regard to its underlying belief structures. Group cohesion must be built around a shared set of values, and a shared vision and mission. If the leadership group is operating from the lower three levels of consciousness, they will not want to involve the whole organisation in this exercise. They will want to do the work themselves. This is potentially dangerous, because they need to involve managers and staff in the process. However, if the leadership group has the results of a company-wide values assessment available to them, they have information to work with that represents the opinions of the whole group.

The process we use to identify the vision, mission and values in such a situation is called the Four Why s Process and is described in detail in Liberating the Corporate Soul: Building a Visionary Organisation. iii This process also works well with individuals who are trying to discover a deeper meaning to their lives. Identifying three or four values is not enough. Each value must be translated into three or four behaviour statements. This is important because values are concepts that transcend contexts, whereas beliefs and behaviours are contextual. The values must be contextualised into behaviours before embarking on personal alignment, structural alignment and group cohesion programs. For example, the behaviours associated with the value of trust in a law firm will be different to the behaviours associated with the value of trust in a car factory. Contextualising is important because it makes the values real and provides an objective measure of compliance. The behaviours associated with specific values can be used in monitoring the performance of individuals. Here are three examples of values and their associated behaviours developed by large a Canadian bank. Values Accountability Supporting Behaviours Take responsibility for my actions Admit my mistakes, learn from them, and take corrective action Do what I say and live up to my commitments Teamwork Actively contribute and share responsibility for results Respect the opinions of others and listen attentively Ask for input and feedback from team members Trust Be open and candid Treat others with dignity and fairness Operate with integrity and support my colleagues The point I want to stress here is that the personal alignment and the group cohesion programs must not only be designed around the belief structures and levels of consciousness of the group, they must also be designed around the chosen vision, mission, values and behaviours. This is an opportunity to inculcate the vision, mission, values and behaviours into the culture - an opportunity that should not be missed. This is why a cookie-cutter approach personal alignment and group cohesion is not appropriate. Personal alignment programs can be carried out with groups of up to 20-24 people from different parts of an organisation, because the focus is on self-knowledge, self-appreciation, and self-respect. They can also be carried out with intact teams. Group cohesion programs on the other hand, should

always be carried out with intact teams. An intact team could be the senior executive group, the leaders of a business unit, or a specific functional unit. One of the ways we link the process of personal alignment with group cohesion is to carry out leadership values assessments and coaching sessions for the members of an intact team after they have experienced a personal alignment program and before they experience a group cohesion program. In this way, they walk into the group cohesion program with their personal development plan based on a clear understanding of the feedback they received from their subordinates and peers, some of whom will be part of the group cohesion workshop. The group cohesion program includes time for each member of the intact team to share the results of his or her development plan. The purpose of this sharing is to make personal transformation mutually accountable. When you and your colleagues stand in front of your teammates and commit to personal change, you are collectively making yourselves accountable to each other for a change in behaviour. The objective of the personal alignment, group cohesion (values and mission alignment) and structural alignment work is to enhance the group s capacity for collective action and build group resilience. There are three aspects to group resilience: a) cultural resilience, b) structural resilience, and c) operational resilience. Cultural resilience involves heightening the group s capacity for communication, cooperation, coordination and collaboration. Structural resilience involves changing the organisation s decision-making and governance structures such that accountabilities are clearly defined. Operational resilience involves developing plans for disaster recovery, so that key business processes can be maintained under all operating conditions. Cultural resilience involves the lower and upper left quadrants the values and beliefs of individuals and the collective. Structural and operational resilience involve the lower and upper right quadrants the operating systems, processes and behaviours of individuals and the collective. Cultural, structural and operational resilience are prerequisites for mission assurance. Mission assurance is the capacity to deliver products or services during times of duress. When there is a shock to the human system (individual or collective), disharmony and dysfunction will show up at the levels of consciousness that are the least developed, or the least in alignment. These are also the levels of the least resilience. Only full-spectrum individuals and full-spectrum groups those who are fearless, and have mastered the needs of every level of consciousness are able to weather continuous shocks. Cultural Entropy Cultural entropy, which I define as the energy in an organisation that is consumed in unproductive work, occurs when there is a lack of alignment between the four quadrants. Cultural entropy is inversely related to resilience. When cultural entropy is high, resilience is low. When cultural entropy is low, resilience is high. There are four causes of cultural entropy. A lack of Personal Alignment: A lack of alignment between the stated values of individuals and their behaviours, particularly among the leadership group. This occurs when leaders show a lack of personal integrity or a lack of authenticity when they do not walk their talk. This leads to a lack of trust in the leadership and a lack of commitment by employees to the organisation. A lack of Structural Alignment: A lack of alignment between the stated values of the group and the behaviours of the group as reflected in the structures and systems of governance. This occurs when there is a lack of collective integrity when the group does not live by its stated values. This leads to cynicism and a lack of trust in the systems and structures that support the culture.

A lack of Values Alignment: A lack of alignment between the personal values of individuals and the collective values of the group. This leads to a lack of coherence, exemplified by fragmentation, separation and empire building. Self-interest takes precedence over the common good. A lack of Mission Alignment: A lack of alignment between the personal sense of purpose or mission of individuals, and the collective sense of purpose and mission of the group. This leads to a lack of focus and fragmented intention. Coherence (values alignment) and focus (mission alignment) lead to group cohesion (level 5 consciousness) and an enhanced capacity for collective action. Personal integrity (personal alignment) and collective integrity (structural alignment) build trust (level 5 consciousness). Thus, we see that cultural entropy is a function of a lack of coherence, a lack of focus and a lack of trust. All these conditions lead to a lowering of resilience and a decrease in the group s capacity for collective action. The following table provides an overview of the relationship between cultural entropy and its impact on the organisation. Level of Cultural Entropy Implications <10% Healthy functioning 10%-19% Some issues requiring cultural adjustment or structural 20%-29% Serious issues requiring cultural or structural transformation 30%-39% Critical issues requiring immediate cultural and structural transformation and leadership development >40% Risk of bankruptcy or implosion requiring a change of leadership All the factors mentioned above, values alignment, group cohesion and cultural entropy can be measured using the Seven Levels of Consciousness model and the Cultural Transformation Tools values assessment instruments. The Seven Levels of Consciousness Model Organisations grow and develop in the same way as individuals. They have seven well-defined developmental stages. Each stage focuses on a particular existential need that is common to all forms of human group structures. Organisations develop and grow by learning to master the satisfaction of these needs. Organisations that learn how to master all seven needs operate from fullspectrum consciousness. Our research shows that these are the most resilient and profitable of all organisations because they have the ability to respond appropriately to all business challenges. The seven stages in the development of organisational consciousness are shown on the following page.

The lower needs, levels 1 to 3, focus on the basic needs of business the pursuit of profit, satisfying customers, and high performance systems and processes. The higher needs, levels 5 to 7, focus on the needs of employees, the long-term sustainability of the organisation, and the needs of society. These needs are: developing a cohesive culture, building mutually beneficial alliances and partnerships, and being of service to humanity and the planet. The focus of the fourth level is transformation a shift from fear-based, rigid, authoritarian hierarchies to more open, inclusive systems of governance that empower employees to operate with responsible freedom. Level Motivation Focus 7 Service Service to humanity and the planet 6 Making a difference Strategic alliances and partnerships 5 Internal cohesion Developing a strong cohesive culture 4 Transformation Adaptability, continuous renewal and learning 3 Self-esteem High performance systems and processes 2 Relationship Relationships that support the organisation 1 Survival Pursuit of profit and shareholder value Organisations that focus exclusively on the satisfaction of the lower needs never become market leaders. They are too internally focused and self-absorbed, or too rigid and bureaucratic. They are unable to adapt to changing market conditions. They are not healthy places to work. They are often ruled by fear, and employees feel frustrated and/or constantly complain about stress. Organisations that focus exclusively on the satisfaction of the higher needs lack the basic business skills necessary to operate effectively. They are ineffectual and impractical when it comes to financial matters, they are not customer-orientated and they lack the systems and processes necessary for high performance. They are simply not grounded in the reality of business. Full-Spectrum Consciousness To be successful, organisations need to learn how to master every level of consciousness. They master level 1 by focusing on financial stability and employee safety. They master level 2 by focusing on open communication, respect for individuals, and customer satisfaction. They master level 3 by focusing on performance, results and best practices. They master level 4 by focusing on adaptability, innovation, employee empowerment, employee participation and continuous learning.

They master level 5 by developing a cohesive culture based on a shared vision and shared values that build resilience and a capacity for collective action. They master level 6 by building strategic alliances with like-minded partners; providing mentoring and coaching for their managers and leaders; and embracing environmental stewardship. They master level 7 by focusing on social responsibility, ethics, global thinking, and keeping a longterm perspective on their business and its impact on future generations. Each of the seven levels of organisational consciousness is explained in more detail below. Level 1: Survival Consciousness The first need for an organisation is financial survival. Without profits or access to a continuing stream of funds, organisations quickly perish. Every organisation needs to make financial stability a primary concern. A precondition for success at this level is a healthy focus on the bottom-line. When companies become too entrenched in survival consciousness and have deep-seated insecurities about the future, they develop an unhealthy focus on shareholder value. In such situations, making the quarterly numbers satisfying the needs of Wall Street can preoccupy the minds of the leaders to the exclusion of all other factors. This leads to excessive control, micro-management, caution and a tendency to be risk-averse. Businesses that operate in this way are not interested in strategic alliances; takeovers are more their game. They will purchase a company and plunder its assets. They see people and the earth as resources to be exploited for gain. When asked to conform to regulations, they do the minimum. They have an attitude of begrudging compliance. Organisations experience their deepest fears at this level of consciousness. The key to success at level 1 is strong financial performance and a focus on employee safety. Without profits, companies cannot invest in their employees, create new products, or build strong relationships with their customers and the local community. Financial stability is the first basic essential for all organisations. Level 2: Relationship Consciousness The second need for an organisation is harmonious interpersonal relationships and good internal communications. Without good relationships with employees, customers and suppliers, company survival is compromised. The critical issue at this level of consciousness is to create a sense of loyalty and belonging among employees, and a sense of caring and connection between the organisation and its customers. Preconditions for creating a sense of belonging are open communication, mutual respect and employee recognition. Preconditions for caring are friendliness, responsiveness, and listening. When these are in place, loyalty and satisfaction among employees and customers will be high. Tradition and rituals help cement these bonds. Fears about belonging and lack of respect lead to fragmentation, dissension and disloyalty. When leaders meet behind closed doors, or fail to communicate openly, employees suspect the worst. Cliques form and gossip becomes rife. When the leaders are more focused on their own success rather than the success of the organisation, they begin to compete with each other. When leaders display territorial behaviours, blame, internal competition and information hoarding become rife, increasing the level of cultural entropy. Family businesses often operate from level 2 consciousness because they are unable to trust outsiders in management positions. Level 3: Self-esteem Consciousness The focus of the third level of organisational consciousness is on performance and measurement. It is about keeping a balanced and watchful eye on all the key operational indicators. At this level of consciousness, the organisation is focused on becoming the best it can be through the adoption of best practices and a focus on quality, productivity and efficiency. Systems and processes are strongly

emphasized and strategies are developed to achieve desired results. Reengineering and total quality management are typical responses to issues of performance at this level of consciousness. The critical issue at this level of consciousness is to develop a culture of continuous improvement. A precondition for continuous improvement is the encouragement and reward of excellence. Level 3 organisations tend to be structured hierarchically for the purposes of central control. Top-down is the primary mode of decision-making. The hierarchical structure also provides opportunities for rewarding individuals who are focused on their own personal success. Very often, steep hierarchies serve no other purpose than to cater to managers needs for recognition, status, and self-esteem. To maintain central control, level 3 organisations develop rules to regulate and bring order to all aspects of their business. Companies that are predominantly focused at this level of consciousness can easily degenerate into power-based silos, rigid authoritarian bureaucracies, and/or a group of internally competitive over achievers. When this happens, failure or collapse will eventually occur unless the organisation can switch from being internally focused to externally focused. Level 4: Transformation Consciousness The focus of the fourth level of organisational consciousness is on adaptability, employee empowerment and continuous learning. The critical issue at this level of consciousness is how to stimulate innovation so that new products and services can be developed to respond to market opportunities. This requires the organisation to be flexible and take risks. To fully respond to the challenges of this level of consciousness the organisation must actively garner employees ideas and opinions. Everyone must feel that his or her voice is being heard. This requires managers and leaders to admit they do not have all the answers and invite employee participation. For many leaders and managers this is a new role requiring new skills. That is why it is important to develop the emotional intelligence of managers. They must be able to facilitate high performance in large groups of people who are looking for equality and responsible freedom. They want to be held accountable - not micromanaged and supervised every moment of every day. One of the dangers at this level of consciousness is to become overly biased toward consensus. Whilst some level of consensus is important, ultimately decisions must get made. A precondition for success at this level of consciousness is encouraging all employees to think and act like entrepreneurs. More accountability is given to everyone and structures become less hierarchical. Teamwork is encouraged and more attention is given to personal development and relationship skills. Diversity is seen as a positive asset in exploring new ideas. This shift, which brings responsible freedom and equality to workers, cannot fully achieve the desired results unless all employees and teams share the same sense of direction or purpose. This requires a shift to the next level of consciousness. Level 5: Internal Cohesion Consciousness The focus at the fifth level of consciousness is on building cultural cohesion and developing a capacity for collective action. For this to happen, leaders and managers must set aside their personal agendas and work for the common good. The critical issue at this level of consciousness is developing a shared vision of the future and a shared set of values. The shared vision clarifies the intentions of the organisation and gives employees a unifying purpose and direction. The shared values provide guidance in decision-making. When the values are translated into behaviours, they provide a set of parameters that define the boundaries of responsible freedom. The values and behaviours must be reflected in all the processes and systems of the organisation with appropriate consequences for those that are not willing to walk the talk. A precondition for success at this level is to build a climate of trust. The prerequisites for trust are fairness, openness and competence. Aligning employees personal sense of mission with the organisation s sense of vision will create a climate of commitment and enthusiasm at all levels of the organisation. Personal productivity and creativity increase as individuals align with their passion. In level 5 organisations, failures become lessons, and work becomes fun. The key to success at this level of consciousness is the establishment of strong,

positive, unique cultural identity that differentiates the organisation from its competitors. The culture of the organisation becomes part of the brand. This is particularly important in service organisations where employees have close contact with customers and the general public. At this and subsequent levels of consciousness, organisations preserve their unique culture by promoting from within. Level 6: Making a Difference Consciousness The focus at the sixth level of organisational consciousness is on deepening the level of internal connectedness in the organisation and expanding the sense of external connectedness. Internally, the focus is on helping employees find personal fulfilment through their work. Externally, the focus is on building mutually beneficial partnerships and alliances with business partners, the local community, and in certain circumstances with non-governmental organisations in other words with all stakeholders. The critical issue at this level of consciousness is that employees and customers see the organisation is making a difference in the world, either through its products and services, its involvement in the local community or its willingness to fight for causes that improve the well being of humanity. Employees and customers must feel that the company cares about them and their future. Companies operating at this level of consciousness go the extra mile to make sure they are being responsible citizens. They support and encourage employees activities in the local community by providing time off for employees to do volunteer work and/or making a financial contribution to the charities that employees are involved in. At this level of consciousness, organisations create an environment where employees can excel. The organisation supports employees in becoming all they can become both in terms of their professional and their personal growth. Everyone supports everyone else. A precondition for success at this level is developing leaders with a strong sense of empathy. Leaders must recognize that they must not only provide direction for the organisation, but they must also become the servants of those who work for them. They must create an environment that supports every employee in aligning their sense of personal mission with the vision and mission of the company. At this level of consciousness, leaders must become mentors thereby creating pool of talent for succession planning. Leadership development is given significant emphasis when organisations reach this level of consciousness. Level 7: Service Consciousness The focus at the seventh level of organisational consciousness is a continuation of the previous level a further deepening of the internal connectedness, and a further expansion of external connectedness. Internally the focus of the organisation is on building a climate of ethics, humility and compassion. Externally, the focus is on local, national or global activism in building a sustainable future for humanity and the planet. The critical issue at this level of consciousness is developing a deep sense of social responsibility throughout the organisation. At this level of consciousness, organisations care about social justice and human rights. They care about ecology and the global environment. A precondition for success at this level of consciousness is self-less service, displayed through a profound commitment to the common good, and to the well being of future generations. To be successful at level 7, organisations must embrace the highest ethical standards in all their interactions with employees, suppliers, customers, shareholders and the local community. They must always give consideration to the long-term impacts of their decisions and actions. Let us now explore how the model of the Seven Levels of Organisational Consciousness is used in to map the values of an organisation to the Seven Levels of Organisational Consciousness. Cultural Transformation Tools We begin the process of mapping values to the seven levels of consciousness model in an organisation by creating customized values/behaviour templates. The templates are lists of

approximately 80-100 values/behaviours. Two templates are used a personal values template that is used to map the values that are important to employees in their lives, and an organisational values template that is used to map the values of the current and desired culture of the organisation. The personal template differs from the organisational template in that it does not contain organisational type values. It only contains individual, relationship and societal values. The organisational template contains all four types of values. The purpose of the customisation is to make sure the values/behaviours that are available for selection correspond to the culture of the organisation and its cultural context. For example, the template of personal values used in Asian countries is different to the template of personal values used in Europe or North America, particularly with regard to relationship values. In many parts of Asia, there are strong kinship bonds (level 2) that are reflected in values such as respect for elders and filial duty. These values have practically disappeared from the more independent cultures of Europe and North America. The customisation of the organisational template also takes account of the type of business, and the vision, mission and values of the organisation. The template must reflect the day-to-day language and concerns of the organisation. For example, the word profit would not be used in a template for a governmental organisation unless this was part of their culture. In the case of Television Company, the value image would be positive, whereas in most organisations image is a potentially limiting value. Image usually indicates attention is being given to form rather than substance. Once the personal and organisational templates have been created, and the list of demographic categories have been chosen, a website is set up where employees can go on-line and take the values assessment. The time it takes to complete a values assessment is between 10 and 20 minutes. Employees are first asked to check the demographic categories that apply to them, and then they answer three questions. The questions usually take the form of:which of the following values/behaviours most represent who you are, not what you desire to become? Pick ten (from the Personal Template). Which of the following values/behaviours most represent how your organisation currently operates? Pick ten (from the Organisational Template). Which of the following values/behaviours most represent how you would like your organisation to operate? Pick ten (from the Organisational Template). The wording of the questions can be amended, but the purpose is always to collect individuals personal values, current culture values, and desired culture values. We can substitute the word team for the word organisation if we want to use the values assessment to identify a team culture. The results of the surveys are presented in the form of diagrams. There are five basic diagrams. Values Plot Diagram: Shows the alignment of the top Personal, Current Culture and Desired Culture Values according to the Seven Levels of Personal and Organizational Consciousness. Also shown is the number of matching personal and current culture values, current and desired culture values and personal and desired culture values along with the ration of positive values to potentially limiting values (PL), and the ratio of values types individual, relationship, organisational and societal (IROS). Values Distribution Histogram: Compares the percentage distribution of all votes (positive and potentially limiting) for Personal, Current Culture and Desired Culture values according to the Seven Levels of Personal and Organisational Consciousness. Also shown is the level of cultural entropy.

Comparison of Positive Values: Compares the percentage distribution of all votes for positive Personal, Current Culture and Desired Culture values according to the Seven Levels of Personal and Organisational Consciousness. The lack of alignment is shown by the gaps in the histograms at each level of consciousness. CTS Diagram: Shows the percentage distribution of all votes (positive and potentially limiting) for the top three levels of consciousness (Common Good), the level of Transformation and the bottom three levels (Self-interest) according to the Seven Levels of Personal and Organisational Consciousness. Business Needs Scorecard Diagnostic (BNS): Shows the distribution of the top positive and potentially limiting, Current and Desired Culture Values according to the six categories of the Business Needs Scorecard. With this understanding of the Integral model and Seven Levels of Consciousness model let us explore the process of whole system change (See Figure 2). Figure 2: Whole System Change Process 1. Develop a Compelling Reason for Change 2. Map Values/Mind Sets/Belief Structures 3. Build an Inspiring Vision and Mission 4. Develop Values and Behaviors 5. Evaluate Ways to Build Resilience 6. Develop Culture Strategy 7. Structural Alignment Building operational integrity by making values and behaviors pervasive. Building structural and operational resilience to enhance capacity of the organization to handle risk under all operating conditions. 8. Personal Alignment 9. Group Cohesion Building personal integrity. Shift in group consciousness from levels 1, 2, and 3 to level 4 and reduction or elimination of potentially limiting values. Stage 1 of building cultural resilience. Building capacity for group collective action. Shift in consciousness from level 4 to level 5. Stage 2 of building cultural resilience. Behavioral Alignment Functional Alignment Values Alignment Mission Alignment Alignment of policies, systems and processes with vision, mission and values to support strategy implementation. Alignment of structures to facilitate dynamic collaboration across functional groups to enhance adaptive capacity. Alignment of personal values with organizational values. Focus on internal relationships within the group. Alignment of personal missions with group mission and group mission with organizational mission. Whole System Change - Preparatory Steps Step 1: Develop a Compelling Reason for Change It is important before starting the implementation of a whole system change project involving cultural transformation that the chief executive and/or the Board have a compelling reason for change. Although I have called this Step 1, the compelling reasons for change build and become clearer as new information emerges from Steps 2 through 5. There must be a clear understanding among the senior managers and the staff why the organisation is embarking on a whole system change process. For unsuccessful companies who are suffering from low performance, the compelling reasons for change are usually obvious. Nevertheless, they must be enunciated. There must be a convincing story that makes the effort worthwhile. For

successful companies, the compelling reason for change is not usually about improving performance but more about how they position themselves to take advantage of future opportunities and build long-term resilience and sustainability. The results of the organisation-wide CTT values assessment provide significant inputs for the compelling reason for change storyline. Ultimately, the compelling reason for change must be so compelling that it unites everyone behind the whole system change process. It must be grounded in reality and driven by hope hope of a better future, and a tomorrow that fulfils the desires of everyone in the organisation. The Cost of Fear: One technique we have developed to support the storyline of the compelling reason for change is to calculate the cost of fear in an organisation. Fears, both subconscious and conscious, are the motivating forces behind many of the potentially limiting values that show up in a values assessment. For example, internal competition is rooted in fears concerning self-esteem. We compete rather than collaborate because we are more focused on self-interest than the common good. People who practice internal competition see life as a zero-sum game with winners and losers. They must win at all costs. Empire building and information hoarding are motivated by similar needs. Hierarchy is rooted in fears concerning status and trust. Bureaucracy is rooted in fears concerning order and control. The underlying fear in hierarchical structures is people cannot be trusted and therefore they must be supervised very closely. They are supervised by people who are loyal to the system and can be trusted. The more loyal and trusted you are, the more status you get in the hierarchy. Those who seek self-esteem through status want to look good in the eyes of their superiors, so they will be concerned about their image. They will blame others when things go wrong, and they will manipulate the system to finish up on top. The underlying fears in bureaucracy are things will fall apart if order is not maintained and people will cheat the system if there are no controls. Therefore, things, meaning worker and productivity, must be checked and double-checked. Bureaucracy and hierarchy feed off each other by giving people power over others. Power seeking leads to empire building another fear-driven approach to achieving self-esteem consciousness. All these activities that stem from fear create cultural entropy. The energy involved in doing internal competition, bureaucracy, hierarchy, empire building, image, blame and information hoarding is not available for useful work. The effort and time that goes into supporting these potentially limiting values results in a loss in productivity and efficiency and an increase in missed opportunities. This is the basis for the cost of fear calculation. After we have completed a values assessment and we know what potentially limiting values are showing up in the culture, we ask groups of employees at different levels of the organisation to estimate the percentage impact of each of the potentially limiting values on lost productivity and lost opportunity. We aggregate the results by staff level and then multiply the average percentage impacts of each potentially limiting value on lost productivity by the total employee costs (salary plus benefits). We multiply the average percentage of lost opportunity by total sales. We add the results of these two calculations together to find out the financial impact of the cultural entropy on the organisation. Although the results are not scientific, they do provide an estimate of the monetary impact of the potentially limiting values on human performance. We have found that reducing the level of cultural entropy by 10 points say from 30% to 20%, can have a significant positive effect on the bottom line results.

Step 2: Understand the Culture/Mindsets/Belief Structures The next step is to understand the culture by carrying out a company-wide values assessment using the CTT approach personal values, current culture and desired culture. The process should begin by mapping the values of the leadership group and their direct reports, and getting the commitment of the leadership group to behavioural change. The rest of the company is then surveyed. The values survey should include demographics such as position, business unit, location, and if appropriate, gender, length of service, race, etc. The CTT values assessment will identify opportunities and obstacles to cultural change and provide guidance in the development of personal alignment, group cohesion and structural alignment programs. In addition to the CTT values assessment, which focuses on values and motivations, in certain situations we will also use the Spiral Dynamics survey instrument to understand the underlying beliefs structures of the leadership group and the rest of the organisation. Step 3: Build an Inspiring Vision and Mission We frequently find that organisations either pay no attention to their vision/mission or simply do not have one. If the organisation already has a vision and mission, then this is an opportunity to revisit it. Often the vision/mission were created years earlier by a completely different team operating under different market conditions. The purpose of revisiting the vision/mission is to make sure it is still relevant and inspiring to the leadership group, the managers and staff. The process we use for revisiting the vision/mission or designing a new one for an organisation is the Four Why s process described in detail in Liberating the Corporate Soul. iv We begin the process of defining the vision and mission with the leadership group. There are three basic inputs to the process; a) the results of the values assessment, b) the core motivations of the leadership group; and c) the definition of the core business. The core motivations of the leadership group are developed through a simple process of finding out each member s deepest motivation for coming to work in this particular organisation, and then finding out what motivations the group have in common. The definition of the core business is arrived at by simply asking all members of the leadership group to write down what they believe is the core business of the group. The results are often fragmented and not sufficiently focused to give the group a clear intention. Agreement on the core business is essential before moving on. Once the core motivations are known and the core business is clarified, it is simple to build an inspiring vision and mission using the Four Why s process. The uniqueness of the Four Why s Process is that it defines an internal vision and mission as well as an external vision and mission. It separates out the organisation s purpose from its character what it does in the world, from what its way of being. The internal mission describes how the organisation is going to grow and develop internally. The internal vision describes what the organisation will look like in 5 10 years. The external mission describes what the organisation does for its customers. The external vision describes the impact that the organisation wants to have on society. The vision and mission statements should be concise, inclusive and easily memorized. They should include all stakeholders employees, customers, the local community or society, and shareholders. The vision statement declares the organisation s intention with regard to the future it wants to create: it describes the end or what the destination looks like. The mission statement(s) on the other hand describe the means to the end what we need to focus on to get to the destination. The vision can be characterized as, this is where we are going, and the mission statements can be characterized as, this is what is absolutely essential for us to concentrate on or look out for in order to get to our vision. The values and behaviours describe the rules of engagement: how the organisation would

like its leaders, managers and employees to relate to each other as they work towards the vision and mission. Ultimately, the real purpose of the vision and mission is to galvanize the intentions of each individual in the organisation around the same purpose. Leaders, managers and employees should have a clear line of sight between their sense of personal mission and the overall vision of the company. This alignment of purpose generates a strong sense of commitment. Work becomes meaningful, and employees can t wait to get to work. No one begrudges going the extra mile if their heart is aligned with what they do and the culture supports them in fulfilling their purpose. The following table provides some examples of visions and missions. Type of Company External Vision Internal Vision Mission Statements Bank To be the leader in Client Relationships. Create an environment where all employees can excel. Help customers achieve what matters to them. Make a real difference in the communities where we work. Bring shareholders the highest total return on their investment. Business Consulting Firm To change the philosophy of business at a global level. Be a global resource for organisational transformation. Support leaders in building values-driven organisations. Build a worldwide network of consultants committed to organisational transformation. Ultimately, the vision, mission and values are guides to decision-making. They are constant reminders for the organisation and for the individual about the outcomes the organisation wants to manifest. They are future-orientated. By keeping the vision, mission and values constantly in focus, the organisation creates a decision-making framework that is self-fulfilling. The organisation consciously creates the future it wants to experience. As Collins and Porras point out in Built to Last: Successful Habits of Visionary Companies, v the distinguishing feature of long-lasting successful companies is that they use their vision, mission and values to guide decision-making. This is not how most organisations operate. They either don t have a vision, mission or values or if they do, they are not used to guide decision-making. They are simply platitudes that are referred to when convenient or things on a to do list that, once done, can be forgotten as the organisation moves its attention to the next task on the list. Step 4: Decide on the Guiding Values and Identify the Desired Behaviours The process of choosing values should not be rushed. The values will become the guidelines or rules for living in the organisation. Values that are shared build trust and create community. They create cohesion and unity. The results of the values assessment provide significant insights as to

what values leaders, managers and employees consider important. For organisations operating from the lower levels of consciousness (levels 1, 2 and 3), the chosen values should stretch them to levels 4 and 5. The next step is to identify the behaviours that support the chosen values. Once again, the values assessment helps in crafting of these statements. The behaviour statements are written in such a form that they can be easily used in some form of performance monitoring process. They can also be used in the Leadership Values Assessment as additional questions. We call this the LVBA the Leadership Values and Behaviour Assessment. It is used in organisations that have developed values and behaviour statements. The feedback provides a measure of the compliance of the leaders to the espoused values and behaviours. The technology we use to identify the behaviours associated with the espoused values is known as Appreciative Inquiry. Step 5: Develop a Resilience Strategy Through Adaptive Capacity Building At this stage, it is essential to take a close look at the resilience of the organisation from three perspectives: cultural resilience, structural resilience and operational resilience. The key issue here is to build the organisation s adaptive capacity. In Corporate Culture and Performance vi Harvard Business School researchers Kotter and Heskett stress the importance of adaptive cultures. An adaptive culture entails risk-taking, trusting, and a proactive approach to organisational and individual life. Members actively support one another s efforts to identify all problems and implement workable solutions. There is a shared feeling of confidence: the members believe, without a doubt, that they can effectively manage whatever new problems or opportunities will come their way. There is widespread enthusiasm, a spirit of doing whatever it takes to achieve organisational success. The members are receptive to change and innovation. vii The focus of the first five steps in the whole system change process supports the building of enterprise-wide cultural resilience specifically levels 5 and 6. Focusing on values such as communication, cooperation, coordination and collaboration helps the organisation overcome cultural obstacles that are created by level 3 hierarchical structures and operational stovepipes. The linear processing and hierarchical management structures that exist in most organisations foster potentially limiting values such as bureaucracy, internal competition, empire building, blame and information hoarding that fly in the face of resilience, agility and the ability to withstand shocks. For resilience to become a reality, every organisation needs to establish a cultural norm that preserves, sustains, and rewards the will to collaborate and cooperate under all operating conditions, no matter how severe or protracted. This is not just an internal issue it is also an external issue. Organisations are becoming increasingly interdependent and interconnected. The resilience culture should also extend to all network relationships. This still leaves the topic of structural and operational resilience. The focus here is on issues regarding governance structures, key business processes and value chains, performance management, and a wide range of operational issues involving technology infrastructure, business continuity planning, IT disaster recovery, crisis-emergency management procedures, etc. What we are attempting to evaluate is the organisation s core capabilities and overall capacity to manage disruptions and withstand shocks no matter how extreme--and sustain operations under prolonged duress. We systematically evaluate each of these factors to develop a resilience map. The objective is to create an organisation that can adapt on demand to a broad spectrum of challenges under all operating conditions.

Step 6: Develop a Culture Strategy A strategy is a plan for achieving a specific outcome. It keeps everyone moving in the same direction. The direction is the vision. The strategy is updated each year depending on how well the organisation is doing in moving towards its vision. The principal subcomponents of an organisation s strategy should be built around the business needs scorecard described (something is missing here described as?) a financial strategy, a customer strategy, a performance strategy, a new product or services strategy (evolution), a culture strategy and a social responsibility strategy. This is an expanded form of Kaplan and Norton s Balanced Scorecard viii. Each component of the strategy is a building block in the achievement of the organisation s overall vision. The values assessment helps to identify some of the key issues that need to form part of the overall strategy. The culture strategy and the performance strategy are the principal vehicles we have for attaining the internal vision and mission of an organisation. The main purpose of the internal vision and mission is to enhance human performance so that it will lead to an improvement in business performance. Just as six-sigma or some form of business process reengineering should be an integral aspect of the performance strategy, whole system change should be an integral part of the culture strategy. Like six-sigma and business process reengineering, whole system change can have a significant impact on performance. Whereas six-sigma and business process reengineering focus on the what the physical aspects of an improvement, whole system change focuses on the how the human element of the improvement. You can improve productivity by streamlining a process: you can also improve it by increasing accountability, teamwork and commitment. Whole system change is essentially a culture and a performance strategy that leads to a broad set of performance improvements. Improvements include positive factors such as: open communication, teamwork, trust, accountability, cooperation, collaboration, coordination, commitment, openness, innovation, creativity, pride and the quality of leadership. At the same time, whole system change can lead to a reduction in the factors that limit human performance such as: bureaucracy, internal competition, blame, hierarchy, empire building, information hoarding, control, caution and short-term focus. As a result of these changes in human performance, we see improvements in business performance such as: profitability, market share, employee satisfaction, employee retention, productivity, efficiency, quality, customer satisfaction and customer retention. Thus, whole system change can be regarded as an integral part of an organisation s business strategy because it has a direct impact on the bottom-line results. Over the past seven years, we have come to recognize that the most successful organisations are those that operate from full-spectrum consciousness; have no potentially limiting values in the Current Culture; have low cultural entropy; and show a strong alignment between the personal values of employees and the values in the organisation s Current Culture, and between the values in the Current Culture and the values in the Desired Culture, as shown by the CTT values assessment. These four factors are found in all high-performance organisations. Whole System Change Implementation Steps The implementation stage of whole system change involves three steps Step 7 focuses on Structural Alignment, Step 8 on Personal Alignment, and Step 9 on Group Cohesion. As previously mentioned, personal alignment should always precede group cohesion, and structural alignment should either precede personal alignment or proceed in parallel. The personal alignment and group cohesion programs should begin with the leadership group and cascade down through each of the

functional units preferably covering the three top levels of management the executive team, the teams of the members of the executive team, and the teams of their direct reports. The structural alignment program usually involves significant changes to the Human Resources systems and processes. Step 7: Fully Integrate the Vision, Mission, Values and Behaviours into the Processes, Systems and Structures that Support the Operation of the Organisation. The key here is to make the vision, mission, values and behaviours pervasive throughout the organisation. To build cohesion the values and behaviours have to be lived. This means changing how the organisation: a) selects and orientates new employees, b) evaluates individual s performance, c) selects candidates for promotion, d) selects talented performers for fast track development, e) designs its leadership development programs, f) designs its management training programs, and g) improves the structure of the organisation. All these facets of the organisation s operations should reflect the desired shift in consciousness and belief structures, espoused values and behaviours, and the vision and mission(s) of the organisation. These changes can take a significant amount of time to implement from 1 to 2 years. Meanwhile, the organisation can begin the process of personal alignment and group cohesion. Step 8: Implement Personal Alignment Workshops The personal alignment program must begin with the leadership team. If this group is unable to model the values and behaviours, then there will be no significant change in the culture of the organisation. The focus of the personal alignment program is to bring people to level 4 consciousness. The leaders need to know themselves and understand their core motivations. They need to identify their limiting beliefs and master their emotions. They need to learn how to confront conflicts or challenge others without fear; how to speak their truth without hurting others; and how to give and take feedback in all situations. The espoused values and behaviours of the organisation are reinforced during the personal alignment program. When people leave the personal alignment program they will be different from when they came in. They will have a more positive outlook, a better understanding of themselves, and feel more confident in dealing with their fears. Personal alignment programs can involve individuals from all parts of the organisation because the focus is on self, not on the team. We build the bridge from personal alignment to group cohesion by having each individual who has experienced a personal alignment workshop carry out a leadership values/behaviours assessment. We want them to get feedback from their peers, subordinates, and managers on their operating values, and their degree of alignment with the espoused values and behaviours. We want them to see how they are coming across to others. This process involves a two-hour coaching session and the development of a personal development program. Individuals walk into the group cohesion program with a personal development plan.

Step 9: Implement Group Cohesion Workshops The purpose of the group cohesion workshop is to take the individuals who have experienced the personal alignment workshop and have developed a personal development plan based on feedback from their colleagues, and move them to level 5 consciousness in their intact teams. What we are attempting to do is to build the team s capacity for collective action by creating internal cohesion through mission alignment and values alignment. The workshop helps each individual to understand his or her personal sense of mission and how it aligns with the overall vision and mission of the group. Participants should leave the group cohesion program knowing exactly how their own sense of personal mission aligns with organisation s vision and mission. If individuals do not have a clear line of sight between their sense of personal mission and the vision or mission of the group, there will be a lack of focus of intention and a lack of commitment. The starting point of the group cohesion workshop is to inform the group of the existing team culture. For this purpose, a team values assessment is carried out using the CTT values assessment. In addition to the group result, individual results are provided for each member of the team. This information is essential for establishing a baseline from which progress can be measured against some form of scorecard, and understanding where the team wants to go (desired culture). The assessment clearly pinpoints gaps in consciousness levels, names which limiting values are operating, and denotes where there is a lack of alignment. The workshop content is customized so that it focuses on these gaps and the lack of alignment. The Author Richard Barrett is the Managing Partner of Richard Barrett & Associates, a Cultural Transformation and Leadership Development Consultancy. He is the creator of the Cultural Transformation Tools. He is an author, keynote speaker and change agent. Prior to starting his management consultancy practice Richard was Values Coordinator at the World Bank from 1995-1997. His books include, Liberating the Corporate Soul: Building a Visionary Organization, published by Butterworth- Heinmann, A Guide to Liberating Your Soul, published by Fulfilling Books. He is currently working on two new books entitled A Whole System Approach to Cultural Transformation and Love, Fear and the Destiny of Nations.

References:

i Richard Barrett, Liberating the Corporate Soul: Building a Visionary Organization (Boston: Butterworth-Heinmann), 1998, pp. 55-72. ii Ken Wilber, A Brief History of Everything (Boston: Shambhala), 1996, pp. 69-83. iii Richard Barrett, Liberating the Corporate Soul: Building a Visionary Organization (Boston: Butterworth-Heinmann) 1998, pp. 103-123. iv Richard Barrett, Liberating the Corporate Soul: Building a Visionary Organization (Boston: Butterworth-Heinmann), 1998 pp. 112-123. v James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperBusiness), 1994. vi John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: The Free Press), 1992. vii John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: The Free Press), 1992, pp. 44-45. viii Robert Kaplan and David Norton, The Strategy-Focused Organization (Harvard Business School Press), 2001.