The following is adapted from a Paper presented by Barry Mapp in 1994 at the ERIK Network European Conference “Regional Successes in Creating and Connecting Companies – European Union Perspectives”

Psychology has always been important in BusinessIn Business, psychology (i.e. our understanding of, or beliefs about, human behaviour) has always been an important factor in “how we do things around here”. Psychology thus underpins the workings of both the old and new style company paradigms. The Psychology of Compliant Companies is “Old Psychology” (behaviour that is predicted primarily from studies on starving animals or unhappy or sick human beings). The Psychology that underpins successful Creation Companies is “New Psychology” where people behaviour is predicted from the studies of animals that were happy and cared for, or from research on human beings that are living happy and fulfilled lives. Note that nearly all textbook psychology is “Old Psychology” – so you won’t find much about new psychology from standard psychology books.It is interesting to note that most of our business advisory groups (like Business Link in the UK) still promote business systems based on old psychology and indeed their own organisational structures and processes are rooted in old psychology. Most Government strategy around influencing business and services is based on old psychology and even most business consultants (including those who profess to be thinking outside the box) are often using “old psychology” techniques and theories. The following table shows some of the fundamental differences between Old Psychology and New Psychology approaches.Old Psychology Principles (this includes):

• (extensive use of) Extrinsic Motivators (Carrot and Stick)
• People Treated like children (heavy on rules and regulations)
• External Targets set from above (nearly all are arbitrary!)
• Blame culture. Whose fault?  Whose head must roll?
• Visible are many of the Seven Deadly Diseases of Management

The New Psychologies embrace ideas like those of Glasser (Choice Theory), Kelly (Constructive Alternativism) and Griffin and Tyrell (Human Givens approach). New Psychology is congruent with Kohn’s research on Co-operation and Motivation, with Dweck’s research on “Self-Theories” and with Deming’s ideas on the transformation of management. (More about each of these Psychologies in later blogs)Coming Next: New Science, New Thinking and Creation Companies

• There is a Lack of constancy of purpose.
• There is an Emphasis on short-term profits.
• There is Evaluation by performance, merit rating, or annual review of performance.
• There is Mobility of management (resulting in high staff turnover)
• There is Running a company on visible figures alone.
• There is Excessive medical costs (this point is related more to the American Market, but we could reframe this as the cost high costs that companies bare of early retirements and redunduncies)
• There are Excessive costs of warranty and Litigation, fuelled by lawyers who work for contingency fees.

There are these Lesser Category of Obstacles also mentioned by Deming:

• Neglect of long-range planning.
• Relying on technology to solve problems.
• Seeking examples to follow rather than developing solutions.
• Excuses such as “Our problems are different”.

Here are three different perspectives on these seven deadly diseases:

1. csqa
2. riskmanagementinsight
3. curiouscat

Coming next: The final principle of Creation Companies: Applying “New Psychology” and “New Science” to the Business

A Creation Company can be thought of as a place (business) where the work systems, work processes, work culture, work management and work leadership are aligned with people and how people work best. Where such alignment occurs this can lead to extraordinary results. When the systems do not get in the way of the work, human spirit and human joy and passion unfold. When alignment happens between people and systems, the work can “flow”, unimpeded by artificial constraints, boundaries, controls or hierarchy. When the work is aligned with how people like to work, then every person in the business is able to perform at their very best, such that everyone has the opportunity to produce extraordinary results. When there is such alignment, individuals have a sense of control or influence over the work and a sense of responsible for their own work

The Fundamental Principles for creating a Creation Company

Tom McGehee says there are three fundamental principles for a Creation Company (and ANY company can generate the excitement, energy, confidence, and audacity of the “whoosh” of a Creation Company by subscribing to these fundamental principles):1)     A  leadership style free from command-and-control principles2)     A corporate culture that values individual expression and collaborative work3)     An understanding that success means creating the new not replicating the oldFrom my personal experience, I would also add two additional principles required for (long-term) Creation Company performance (this makes it five principles in all) and these will be discussed in the next blogComing next:  Five Working Principles of Creation Companies