Why Tesla are Penguins in Santa Hats

A Christmas card I saw got me thinking about the importance of polarity and poles, and the tension and turbulence between them. Value Management resolves the tension. And it explains why Tesla are penguins in Santa hats…

Christmas is over and the new year is underway.

But before we move on entirely from the festive season, I want to share some thoughts triggered by a Christmas card I saw that showed penguins wearing Santa hats.

Because, even though it won’t have been what was on the card designer’s mind, there’s something both very wrong and very right with that image.

What’s very wrong, of course, is that everything to do with Santa is bound-up with the North Pole… whilst penguins live entirely at the South Pole.

But what’s very right is that – despite our card designer’s apparent polar confusion – it unwittingly reveals two important truths:

• The need to be clear about poles.
• That it is possible to achieve balance and find a middle ground between poles.

Because whether we realize it or not, we are all constantly operating between two poles, and success depends on navigating the turbulent territory between the diametrically-opposed forces that these poles exert on us.

(Which is why, as we’ll see, Tesla are penguins wearing Santa hats.)

A Universal Polarity

So, moving beyond the literal geographic poles (and switching from literal north-south to a left-right representation) there is a universal conceptual polarity that describes our world.

This conceptual polarity takes many forms, but it can be generically expressed as Stasis on the left (a state of total rigidity) and Chaos on the right (a state of total disorder):

The opposing ‘forces’ exerted by these generic poles – Control towards Order, and Autonomy towards Creativity – push and pull against each other to create a volatile, uncertain and ambiguous middle “zone” between them.

And this “sweet” zone is explained by the science of Complexity and governed by its laws (such as the law of increasing functional information), and where Complex Adaptive Systems naturally emerge (“Complex Adaptive Systems” is a generic term for anything that exhibits the attributes of Complexity, including people, organizations and ecosystems):

You can read more about Complexity elsewhere on this site, but the point is that understanding and navigating this “sweet zone” is the challenge we all face, and it’s all about achieving the appropriate balance between the poles and never straying too far from the center of the zone.

And that’s because the tension between the polarities is the source of all of our challenges…

…and also the source of the opportunities for overcoming them.

Life in the Middle

Generically, then, in order to survive and thrive, Complex Adaptive Systems (remember: these can include people, organizations and ecosystems) utilize contrasting strategies:

• A command-led Exploit strategy focused on existing resources to manage the left hand boundary of the middle zone.
• An empower-let Explore strategy focused on new resources at the right hand boundary of the middle zone.

The necessary balance between these strategies varies, and it is always precarious:

• In the case of a supply chain, for example, the balance will be closer towards Exploit, because you need repeatability, efficiency and order… but head too far in that direction (towards “Stasis”), and the supply chain ossifies, unable to cope with change.
• Equally, when looking to innovate – perhaps in an R&D capacity – the balance will be closer towards Explore, because you need “disruption”, something new and something not limited by what’s already in place… but head too far in that direction (towards “Chaos”), and you lose touch with what’s possible and achievable.

Complex Adaptive Systems therefore survive and thrive by dynamically balancing, trading-off and harmonising the Exploit / Explore strategic choices.

However, organizations are typically vehicles set up to Exploit an offering – usually with familiar command and control mechanisms – and most ecosystems tend in this direction, too, especially networked supply chains that are established primarily to achieve “business as usual” (Exploit / Order), which can work against the ability to change (Explore / Creativity).

And this susceptibility to yield to the gravitational pull of the Exploit “pole” is then explained further by how this universal polarity plays out in the human brain.

Our Polarized Brains

Now it turns out – whether by design, evolution, or some combination of the two – that the human brain is quite probably the ultimate Complex Adaptive System in the known universe.

And it, too, operates in terms of polarity.

Whilst this polarity is more nuanced than the hemispherical physical structure of the brain, this physical structure nevertheless reflects it – and broadly maps it – as the work of Ian McGilchrist describing the impact of the hemispherical lateralisation of the human brain has made clear:

So, the left “hemisphere” has an Exploit bias, and the right “hemisphere” has an Explore bias.

In McGilchrist’s terms, the left is a great “Emissary”, but when it takes over as the “Master” from the right – which, for a whole host of reasons, is our natural tendency – it can lose its way, leading to unintended and extremely damaging consequences.

In particular, the left brain – being the gatekeeper of language – manifests its bias by ‘freezing’ dynamic processes (verbs) as things (nouns), and we see this reflected in organizational language.

For example, we more readily talk about “Leaders” than “leading”, “Managers” and “Management” over “managing”, “Trust” over “trusting” and – most importantly – “Value” over “valuing”.

Now, nouns are very useful.

They enable us to refer to a “supply chain” rather than “chaining to supply what is being valued”, for example. And they enable a shared focus of attention on to some-thing, which otherwise would be seen as a continuously changing process, which would otherwise resist being pinned-down.

But there’s the rub.

Because in these nominalisations, we lose the sense that such “things” are emergent (in Complexity terms) and we seek to pin-down, define, control and manage them as “fixed”, losing their dynamism, action, fluidity and subjectivity.

We talk about “Trust”, for example, as something to “build”, rather than as what it really is – an emergent property that flows from when the parties understand each other and reliably act in accordance with each other’s interests – and, most of all, we end up limiting “Value” to being just a “thing” with a price, when it is instead always subjectively perceived.

When It All Goes Wrong

I saw first-hand what it looks like when we drift too far into nominalisations – too far into Exploit; too far towards Stasis – during the decade or so I spent at Hewlett Packard from 1979 onwards.

During that time, I witnessed how what was an exceptional company – with 77,000 people distributed across the globe that retained a shared ethos – became ordinary over a couple of years in the mid-nineteen-eighties.

And this rapid decline was particularly shocking because of HP’s seemingly robust culture – set out in the “HP Way” – which was reinforced through a fund of great corporate stories, and coupled with the belief that innovating on behalf of the customer would naturally lead to successful outcomes and be rewarded as a profit.

I had to find out what had gone wrong, and it’s taken my working life since then to figure it out.

It’s because HP unconsciously drifted out of the middle zone of Complexity and got “stuck” in the “tractor beam” of the Exploit pole…

…and there have been two “levels”-based models I’ve found that are very helpful in explaining more precisely what went wrong, and – by implication – in helping to raise awareness: not only to avoid problems, but (at least as importantly) to make consciously advantageous decisions.

And both models – alongside a number that have subsequently emerged – are represented in our 35-year-old logo:

This logo sets out a series of levels within a triangle or pyramid – each level is influenced by the level above it, and each level influences the level below it, with learning percolating up the levels.

Generally, the higher the level, the more intense and slower moving it is, becoming more dispersed and faster moving at each descending level.

Logical Levels: Model 1

The first model, coming out of the domain of individual and group dynamics – and based on the work done by Robert Dilts – flows down from the top in this order:

Identity is the most challenging to change and Transactions are the most transient.

However, there’s a boundary or barrier which typically emerges between Beliefs and Capabilities in the operational life of Complex Adaptive Systems, which then disrupts the free flow between two – now separated – sets of “levels”:

The barrier also reflects the polarities we’ve been talking about: the left hand pole attributes (Exploit, etc) being below the separating line, and the right hand pole attributes (Explore, etc) being above the line.

Because of organizations’ understandable focus on Exploiting existing assets and resources, the emphasis unconsciously shifts towards actions and activities which are left-pole (and left-brain) dominated.

However, it is the upper levels that provide the context, or culture – embodying the purpose and principles – that enable and encourage an organization to adapt and innovate.

And without conscious attention and nurturing, the upper levels get taken for granted, such that – as with HP – they fade from focus and even disappear over time.

Value To Restore Balance

The way to avoid this is to relentlessly put attention on Value – primarily Value as perceived by the customer – because Value dissolves the distinctions between the levels and the boundaries:

It is the “magic attractor” at all levels; it enables the organization to reconnect and/or reawakening its “spirit”.

However, because “value” can be used as a noun or a verb, its meaning and implications can be ambiguous, and that’s why we typically talk in terms of the Things That Matter:

As my colleague, Steve, has explained in this article, “Things That Matter” is far less abstract, more approachable and more intuitive.

Logical Levels: Model 2

The logical levels in the second model – based on the work of Harrison Owen – are also encapsulated in our logo, and they relate more directly to organisational situations:

Again, the boundary applies, this time between Understanding and Language.

Below the line, where the left brain operates, the machines have a significant or unassailable comparative advantage – note the “language” in large language models: it’s what they are optimized for.

Above the line, where the right brain makes sense of the world, (most!) humans still have a significant or unassailable comparative advantage, which is why organizations intuitively sense the importance of their people.

Whether you realize it or not, there is therefore a battle playing out between Humans and Machines (Human vs AI text), and if you’re below the boundary, along with the majority, you’re likely to be an increasingly second rate “emissary” and will probably get blown away.

In Conclusion

So, taken together (and adding in the things we’ve been talking about), these two models not only map the terrain that organizations are trying to negotiate between the poles – the middle zone of Complexity – they also map the wrong turns organizations are taking.

They show exactly what got lost at HP and what all organizations and ecosystems are in danger of losing.

But they also show what to do about it:

• Complexity-awareness (which establishes the challenges).
• People-centred (as the true “masters” over AI in responding to them).
• Value-led (as the way to overcome the challenges).

In other words, what we call Value Management.

And as we can see when we look at Tesla, it works: the Musk companies seem to truly ‘get’ and utilize the power of Value Management:

• Intuitively using value-derived-through-the-things-that-matter to dissolve the levels and boundaries
• Able to seamlessly flow forwards from Inspiration to Data.
• Adept at capitalizing on the feedback loop back up to Inspiration.

In other words, his companies embody and balance the poles.

And that therefore now explains why – to return to where we started – we can say that Tesla are Santa hat-wearing penguins (!).

And now I really will move on from the festive season…

…but not before wishing you a very Happy New Year…

…and challenging you to consider how you plan to consciously integrate and utilize the complementary forces of polarity we’re all subject to…

…or, more simply, are you ready for Value Management? Contact us when you are!