The Big Shift: Challenge and Opportunity for Women

How are women affected by the longer-term changes that are transforming our business environment? This issue is rarely explored.  Since I am on the edge anyway, I thought I would venture into this potentially sensitive topic. 

Last week I had an opportunity to address a gathering of TEDxWomen in the Bay area. This offered the opportunity I needed to frame a perspective that had been been evolving regarding the gender implications of the Big Shift.  My talk last week provided me with the forum to share some of these ideas.  It was very well received, so I thought I might share it with a broader audience here to get further feedback and reactions.

The challenge for women

As those who follow me know by now, a key element of the Big Shift, especially in its early stages, is a significant and sustained erosion of corporate performance.  This is a trend that has been playing out for over four decades now. It is represented most graphically in our Shift Index by the 75% decline in return on assets for all US public companies since 1965. It shows no sign of leveling off, much less turning around.

In a period of mounting performance pressure, targets of biases tend to suffer the most. When rewards become scarcer, there is a tendency for people who are discriminated against to have an even harder time in getting ahead.  Since women continue to suffer bias in the workplace, this mounting performance pressure represents an even greater challenge for them.

But it gets worse.  As pressure increases, there is tendency to adopt a zero sum view of the world – if someone else gains, I necessarily must lose.  In this view, we are at war; we can give no quarter.

The prevalence of the masculine archetype

In a time of war, a certain type of approach tends to become more dominant – let me call it the “masculine archetype”.  The masculine archetype is built upon a certain set of beliefs:

• We can't afford to get tied down in long-term relationships - our focus is on short-term transactions (“battles”) where the goal is to get as much as possible out of each transaction and to treat each transaction as an independent event – buy low, sell high and move on

• There is no room for emotion – emotion is a luxury that we can’t afford to indulge in, we must put emotion to the side

• Expressions of vulnerability must be avoided at all costs – we must always project strength

• We must be deeply analytical, dispassionately seeking to understand the world around us

• Complex systems can and should be reduced to their component parts so that the analysis is feasible and can be completed in a short period of time

• Once we understand the component elements, we need to move quickly and ruthlessly to exploit any advantage available to us

• Change represents threat and risk – we must find ways to control our environment so that it stabilizes and becomes more predictable

From the viewpoint of this masculine archetype, what we really need are a few good men (literally).  If women want to participate in the effort, they must be prepared to adopt and embrace this masculine archetype.

Understanding the cause of mounting pressures

This reaction to the mounting pressure is a key part of the problem – it reflects a complete lack of understanding of the sources and causes of the mounting pressure that companies are experiencing.

Put briefly, the mounting pressure is not just the result of intensifying competition.  The basis of competition is also shifting in fundamental ways.  For example, the source of value creation is shifting from knowledge stocks to knowledge flows, something I have described in more detail elsewhere. In a world of more rapidly depreciating knowledge stocks, the only way to continue to create economic value is to find ways to participate in a larger number of richer and more diverse knowledge flows. The deterioration in corporate performance reflects our futile attempts to make practices and institutions developed in a previous era work in a new era requiring different approaches to create value.

Requirements for success

Let’s drill down on this a bit.  When I talk about knowledge flows, I am not focusing on large databases flowing through cyberspace.  The knowledge that has greatest value in times of rapid change is tacit knowledge, the knowledge that we all have in our heads that is tied to certain contexts, often quite new, and that we have great difficulty expressing to ourselves, much less anyone else. This knowledge is usually experienced holistically rather than reducible to abstract categories and isolated modules. For all of these reasons, this knowledge does not flow very well at all. In the words of my esteemed collaborator, JSB, this knowledge is remarkably sticky.

As a result, trust based relationships become more and more valuable.  It is only in the context of trust based relationships that people become willing to invest the time and take the risk to express the tacit knowledge they have. So, if we want tacit knowledge to flow, we must first become adept at building deep, trust-based relationships.  Trust is challenging to build.  It requires a willingness to express vulnerability – if we are unwilling to express weakness or failures we have had, it is very difficult for someone else to fully trust us.  Trust is also easier to build when it is clear that all participants are driven by a desire to learn and reach new levels of performance.  In that context, zero sum relationships that focus on dividing a fixed pie of rewards evolve into positive sum relationships where participants are driven by the opportunity to expand the overall pie.  When there is a real prospect of expanding rewards, we are much more likely to trust others than when everyone is focused on how to get a bigger share of a fixed pie.

In a rapidly changing world, though, it is not enough to have a few trust-based relationships.  To get access to a broader and more diverse range of knowledge flows, we must find ways to scale the number of trust based relationships that we can build and maintain.  Rather than a few trusted strategic partners, we must find ways to weave together large ecosystems of participants that can help us to more rapidly refresh our knowledge stocks by tapping into many diverse environments.

Now, let’s step back and reflect on the masculine archetype described earlier.  Is this archetype one that is likely to succeed in the effort to build large numbers of trust based relationships to access tacit knowledge?  Not very likely.

The feminine archetype

What is required is a very different archetype.  For convenience and contrast, let me characterize this different archetype as the “feminine archetype”.  What does it look like?

• We need to build and nurture long-term relationships, rather than focusing on short-term transactions

• To really understand the world around us, we must adopt a much more holistic approach, seeking out the patterns and deep dynamics that shape broader more complex systems

• Our communication styles need to become richer and more nuanced – rather than trafficking in large data sets and quantitative analysis, it focuses on metaphors, stories and images as a way to engage the imagination and achieve a deep understanding of the essence of events and environments.

• We will be much more effective if we can integrate our feelings and intuition to deepen connections, motivate participants to act and mobilize them in ways that increase impact

• We embrace change because it provides a powerful catalyst for growth and learning

This archetype is far more promising in terms of building long-term trust-based relationships and participating in flows of tacit knowledge.  In fact, by facilitating these efforts, this archetype can turn mounting pressure into expanding opportunity.  We may for the first time have the opportunity to move from a diminishing returns world to an increasing returns world.  This truly would catalyze a profound shift.

The bottom line

The future of business belongs to the feminine archetype.  The future belongs to those of us, female or male, who can adopt and embrace the feminine archetype.  It offers far more potential and possibility than the masculine archetype which worked much better in a world of scalable efficiency than in today’s world of scalable peer to peer learning. Those of us who remain wedded to the masculine archetype will find ourselves increasingly stressed and challenged as the world evolves more rapidly around us.

Now, of course, it is ultimately not an either/or choice.  We must find ways to more effectively integrate the masculine and feminine archetypes to draw on the strengths of each.  But, at the end of the day, the pendulum must swing much more in the direction of the feminine archetype if we are realize the potential that the Big Shift represents for all of us

Comments

[Monica]

I have been talking about the distinction between Reductionist and Holistic methods in the sciences and especially in AI research which has been misclassified as a Reductionist discipline for sixty years. So far I have been reluctant to bring the gender based differentiation between the favored methods into the discussion but it is clearly there; and it might be a factual evolved differentiation going back to hunter-gatherer times.

The Knife is the Reductionists tool. It divides larger problems into smaller ones that are easier to solve. The basket is the Holist's tool. When problems cannot be solved, Holists gather more resources.

Someone with both tools is clearly best prepared since they see more solutions to every problem. In simple situations it doesn't matter but in some situations using the wrong tool prevents progress and we may not realize that's our problem, especially of we are much better knife-wielders.

And yes, if your model or problem solving is dividing what exists, then zero-sum is a more likely "solution".

[Muthoni]

I think a combination of both is good realistically speaking. Sometimes change is not entirely necessary because the systems in place are fine and built in a way that allows for sustainability and sometimes emotion is not a necessity... I think a balance is what is needed as opposed to an X vs. Z type of system.

[Gregory Rader]

John great post. This analysis begs the question, how will masculine culture adapt to this imperative. I recently came across a quote discussing the dominance of paternalistic values in contemporary culture to the effect of "the world is not organized around connection", the implication being that it is organized around competition (masculine). Yet, increasingly as you note, the world is organized around connection.

I am optimistic that men (and the masculine) will adapt successfully just as women (and the feminine) have adapted quite successfully to paternalistic culture. Social media/web 2.0 culture is quite literally a culture built around connection and yet is a culture that many men have embraced enthusiastically.

[Ivan]

The future of business belongs to the feminine archetype.

Depends on how you define feminine archetype.

Margaret Thatcher is very different than other female leaders, for example.

[Joe McCarthy]

I thought about the feminine vs. masculine at several points while reading The Power of Pull, and am glad to see you highlight the distinction here.

I recently encountered another example that corroborate several of your points. Alyssa Royse wrote a Seattle 2.0 blog post about Are VCs Too Smart For Their Own Good?, in which she reminded me of an insight shared by Guy Kawasaki:

... you should always get a woman’s opinion. It’s not because he thinks women are genetically superior (though he does say that,) it’s that we’re better at evaluating a bad idea when we hear it. He blames it on the fact that men have a “killer instinct” that makes them predisposed to think that any idea that will lead to “killing” an existing company or product is a good one that should be pursued. This killer instinct (which I think sounds very similar to the instinct to get laid,) supposedly clouds men’s ability to think clearly and rationally, and sometimes makes them make stupid decisions, (which again, sounds very similar to that instinct to get laid.)

[Angela Dunn]

Thank you, John,

Some numbers of success:

"New research shows what many have long suspected: women entrepreneurs are poised to lead the next wave of growth in global technology ventures." http://www.illuminate.com/whitepaper/.

Cheers!