#147: Startups That Last Part 2

Startups that will Last – Part Two # 142

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We had a request from an enthusiastic listener who has read the Carol Sanford books and has been listening to all of our podcast episodes. His name is Peter Nelson, CEO  of Threshold. A startup that helps Artists of all kinds– musicians, authors, podcasters, or anyone else with a fanbase– find their fans anywhere around the world and set up events in their fans’ home or business base.


To review, his question was-  “What are the most important steps I can take now, in the infancy of my company, that will help me build a regenerative business that lasts? As an entrepreneur, I only have so much time and money so I want to make sure I’m using the time and money available wisely.”


In part one of this episode, we covered the first two aspects of what it takes to start a regenerative business that lasts. The first is starting from concrete global imperatives and away from abstract ideas like mission statements or broad generalizations like `making a better society’. The second was starting with the essence of a working system and how we can contribute to it, rather than simply “being adaptable to change.”


A Purpose Driven Company

So, as we get started here, our focus is all about moving beyond founder driven decisions, to more scalable leadership earlier in the life of the business. The authors are defining scalable as meaning “to overcoming the founder’s mindset” which basically defaults to the early leader’s way of thinking.

  • They specifically suggest that as early as possible, the leaders move to a system of leadership from which they can delegate and distribute decision making. Particularly, using vision and values as a way to spread autonomous decision making. That sounds like a vision or purpose driven company. And many of our listeners would say that it is the ideal.
  • But this concept is flawed. Particularly as the means to have decision making more non-hierarchical which they are rightfully guarding against here. One of the hardest habits we have to break with well-intended founders is thinking that the highest leadership form is vision, mission, or purpose driven. That is how you do business in many ways, but not how you direct the company.
  • It’s like telling the crew of a naval ship to remember we are trying to free a country or win a war that ends all wars and expecting them to be able to navigate the ship day to day.
    • You still have to have the captain and senior officers setting and resetting courses to get to the targeted spot and do the job there.
  • We need a much better navigation method. We call that corporate direction which also has a more grounded way of managing the how, being built in. We talked about this a little in Part 1, and for review here is an example of corporate direction:
    • Seventh Generation’s Corporate Direction is “Being The Authentic Voice for Sustainability in one’s home and in our Planetary home”. All product development and sales or finance can see if they are foster an authentic understanding in the arenas they serve.
    • And they were able to grow revenues for the next five years. This authentic corporate direction keeps them on a course to demonstrate in all endeavors.  It includes the global imperatives but points to the intersection that their Essence means they can hold.
    • Corporate direction is the a priori work to do. It is the foundation of lasting through time. And it gives you a way to change course if needed to get to the destination, which happens over decades of running a company rather than having a fixed  idea of how to navigate the ship.
      • It gives you a way to become non-displaceable over decades and even centuries rather than being resilient when disruption occurs.
    • There are three alternatives we pointed to a bit last time, that speak to the corporate direction that is Founder or Executive decided.

What does this mean?

    • Global imperatives are a better indicator, giving people what is needed for decision-making, instead of an abstract mission. Essence on the other hand, is a timeless, unchanging aspect that becomes the rudder on the ship we are speaking about. Now, we have the basis for a corporate direction. That is, what everyone on the ship is holding in mind when making local and global decisions.
    • Once we have that in place, we have to designate a developmental infrastructure that demands decisions be made with the corporate strategic direction. Otherwise organizations are still dependent on top managers to issue course corrections.
      • In another episode, we will also speak about the need for Managing Principles which is how we will run the ship. These two are better ways to infuse decision making ubiquitously,  than to scale values and vision while keeping a hierarchy that delegates the direction for the whole, and how we will manage as we do that. You cannot shift decision-making and innovation to be ubiquitous without them.
        • By developmental infrastructure, we mean the basic physical structuring of a business or nation—transportation, communication, sewage, water, and electric systems are all examples of infrastructure. But also, how we frame how people can work through the structures we design and use. Pay & progression, principles, reporting hierarchy, roles, teams, and ways to participate.
          • These are all defined relationships that require ongoing investment to be known and used, and are vital to an entities’ economic and social development, and prosperity.


Living Systems and Creating Infrastructure


  • To elevate the idea of enduring to non-displaceability we have to look at how living systems create infrastructure, not nature, but the interface with all of life.
  • Ways of looking at Living systems
    • Understand they are playing a role in a greater system serving the greater and lesser systems and are directly in contact experiencing the working.
    • They can be counted on to evolve to what is needed by those systems they serve by understanding how they connect and work together. E.g. how the ecosystem of a forest works, not trees or water separately.
    • Every aspect of the system innovates in service of the whole being more able.
    • Every aspect of life is self-regulating. It is built into how they work in spite of behavior science. Feedback of not needed to improve. E.g. we have mirror neurons and empathy receptors to be able to experience our effects on others and nonhuman life, although they are poorly developed in us as humans
      • Development of the capacity of each role or each entity is ongoing in real time and eternally.
        • An example here are honey bees. Even bees change their engagement in a forest when it’s being attacked;  just as a person becoming a parent sees what is needed for their children, and seeks to learn and contribute at a higher level. Even when someone like me who became a step father, took on the children who up in a second marriage. We don’t just adapt, which is a lower way to engage. We evolve and grow as a living system must.
      • So if we look back at the article now, that’s actually counter to what we see here in their suggestions.
        • For example – when speaking about delegation – delegation is not direct contact – its all intermediated. And rapid iteration is what you substitute when you are working without a clear corporate direction.
        • There are two important guidelines which flow from a regenerative view.
      • First, ongoing development of capacity in a structured way that grows the capacity of each to do its job.
        • Orchard Supply Hardware for example had monthly development sessions with a core group responsible for designing the new thinking into the work and way of working and developing others. This included critical thinking skills with frameworks and a lot of person development to self-managing our behavior and thinking.
        • Secondly, to use that capacity building for the ongoing innovation in retail, they has a process that everyone was involved in design the innovation or new offering that wanted to bring to the customer’s  and other stakeholders. It required them to .
          1. They learn to make bigger promises overtime and design how they would grow themselves to deliver on that. Sometimes alone and sometimes a few people together take on a really big challenge. Some even go back  to school in the case of the Cummins/Case Engine teams in Rocky Mount, NC.
      • Second, they design the evaluation of the promise delivery progress, to determine the effect on users but also the effectiveness for the user as they seek to achieve their aspiration. Customers, Consumer, Distributor. And the financial effectiveness of the business. They designed and led the assessment of these goals along the way. People are directly involved in that, not the subject of it.
        • That is what founders do for themselves but never seem to pass that down as they grow. Instead of cascading that structuring, they cascade answers, their answers. That is a huge shortfall in not only being able to build the capabilities of folks within the whole organization, but this also hits on the issue of knowledge transfer when a founder leaves, which so many organizations complain about.
      • Third, they focused on promised innovations and changes that they, personally or with a market field team, had researched well and knew it would serve all stakeholders affected.
    • Finally, all of this is tied to, justified by, and evaluated in terms of who it fits with the corporate direction and managing principles. So, when the strategy moves the people can use the infrastructure to pivot to the needed direction without losing essence.
      • That is the core rudder which is timeless and tells you what to pay attention to, how to pay attention and how to seize it in a way no other business can because they cannot be used.
      • And to set courses to the moon, not just on the sea, that no one has. And if actively used it can be generous to come in the way of directing the business and the values for managing and leading.


If you are a business, we invite you to join us our Regenerative Business Development community where we apply regeneration to your business and give the details on the second opinion we offer., We use Living systems principles as they apply to producing  regenerative strategy, leadership and work design for human development.


We have a unique way to help with Free Regenerative education. Through The Regenerative Business Prize. Nominations are now open for The Regenerative Business Prize where get free Regenerative education and reflections from our panel of reviewers on your business’s integrity with the 7 First principles? Look for the Prize tab on The Regenerative Business Summit website. Submissions open now until the end of APRIL. The timetable is on the summit. Webpage  download the rubric from the prize page and learn about how to avoid greenwashing with your good deeds and offerings.


There are many other ways to join us from books with Book Clubs with Carol, to engaging in one of nine Regenerative Life Communities? Check out on Carolsanford.com/offerings. ,The Regenerative Women Entrepreneurs Community has openings. Check it out on SEED-Communities.com.


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Carol Sanford and Zac Swartout, co-producers


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