Quentin R. McDowell is principal of the school of Mercersburg Academyan independent college prep boarding & day HS based in Pennsylvania.
In any industry or sector, organizations tend to place artificial limits on how much they can change. This is often based on an inability – or unwillingness – to look beyond the immediate framework or system in which they operate. “That’s how we’ve always done it” is the usual refrain.
However, if you only see the immediate reality, it is easy to get stuck or only make incremental changes. To be transformative leaders, you need to think in multiple dimensions.
First and second order thinking
A first-order perspective is when we view things from our existing schemas or ways of looking at the world. Approaching a business from this perspective leads to so-called common sense decision making that can actually make us do things in ways that no longer work. That’s not to say that first-order change within existing schemes isn’t important. It can help solve everyday problems and create incremental shifts to support broader organizational initiatives, which we certainly still need.
By mapping the proverbial forest as a system of deeply connected organisms, we can understand second-order thinking. Focusing on the relationship between different parts of an organizational system can help change the way we work within our elaborate schedules. In second-order thinking, we include ourselves as part of the system so that we can consider the impact of our own actions.
For example, if a company wants to foster a deeper sense of belonging, results may vary based on first- or second-order perspectives. At a first-order level, leaders can simply focus on an intentional plan to hire workers who represent a wider range of social venues. While this could change the look of the company’s workforce, it’s unlikely to change the way it does business. Looking through a second-order lens, that same company could go a step further and develop a diversity, equality and inclusion committee to complement its recruiting and retention efforts. Now, in addition to changing the look, it is recognized that it is necessary to support those different perspectives and backgrounds.
However, a significant evolution of practices and results should not be expected at this time. There is no doubt that it is shifting to a second-order perspective essential for good leadership. By stopping there, however, we miss opportunities to be intentional in how we respond to the broader contexts in which organizations are embedded.
Evolving to third-order thinking
Transformational leadership requires us to see our forest within a larger map of forests – and deserts, oceans, cities and countries – and their relationships with each other in a global economic, social and environmental context. This is third-order thinking, and it is vital to understand how seemingly independent systems exist and operate within much larger networks. In business, this includes recognizing variables such as industry standards, professional standards and trends, and cultural expectations as forces within the complexity of the wider societal context.
If the company were to take a third-order approach, it would move beyond intentional hiring and programming and begin to explore the broader systems, frameworks and practices that are central to how it works. This will allow it to better adapt to changing social and economic contexts. Such third-order change invites opportunities to grow in exponential and creative ways by expanding the way people think in organizations. This can lead to a transformation of the vision, mission and goals of the organization.
Participating in third-order thinking
By appreciating the value of examining change through first-, second-, and third-order lenses, a leader is better able to lead an organization toward positive and productive change at all levels. An illustration of the concept is examining the interaction between democracy and capitalism. Democracy states that all members are equal while capitalism relies on the existence of a class system. Understanding the impact and outcomes of these two coexisting systems can be incredibly helpful to any business leader. Democracy and capitalism dominate socioeconomic rules and expectations in the United States, but are also at odds with each other. If we fail to understand and appreciate this reality, we will continue to harbor ideas and expectations that are both unrealistic and often impossible to fulfill.
In reality, there are no easy road maps for understanding and valuing the vast array of interconnected systems that define the social, economic, political and cultural frameworks in which we operate. This is another emerging field. But here are a few general steps to light the way.
• Resist the temptation to rely too much on top-notch, common sense solutions.
• Take into account the second-order social and relational dynamics within your own organizational system.
• Pay attention to the interaction between systems at a broad societal level. Connect the dots to understand how they affect and are affected by all stakeholders.
• Use third-order thinking to act with intent. This will help you support and create more inclusive, equitable practices.
Third-order change is possible when organizational values, mission, vision, policies and actions are based on comprehensive, contextual perspectives. Increasing our understanding and appreciation of the larger societal systems and environmental contexts is an important benefit. Leaders who are willing to incorporate this broader perspective into their day-to-day work are better able to lead to effective and lasting change.