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The Biological Foundation of an Evolutionary Economy and its Implications for Organizational Culture and Leadership: A New Framework for Strategic Decision-Making

Part of the Sustainable Finance book series (SUFI)

Abstract

This article presents a whole new understanding of a healthy evolutionary economy based on the biological principles of living systems. It provides a radically new framework for strategic decision-making, especially for Positive Impact Investors.

First, I briefly summarize current economic and scientific assumptions and highlight their outcomes. In so doing, we recognize how strongly we are tied to a treadmill, constantly creating more sickness and reinforcing the gap between social, ecologic and economic welfare. We will deepen the understanding of the underlying traditional mind-set, which consists of denying the reality of our natural environment and builds on the scientific assumptions of virtually closed and controllable systems.

The following chapter will lead to a new paradigm, based on the scientific theory of biological, living systems. It will show how living systems actively cope with the characteristics of the natural environment: unpredictability, openness, limited resources, emergence and dynamic disequilibrium. Living systems are not only able to survive within these conditions, but to use them proactively to sustainably co-create a maximum of shared value for all stakeholders, with the minimum energy expended, while maintaining their ability to evolve. Healthy living systems constantly use their energy to modify the environment in such a way that they can create more shared value. Their ultimate biological aim is to flourish. Under these conditions, not only the gap between social welfare, environmental sustainability and financial profit dissipates but, like living systems, we create self-reinforcing, autocatalytic, highly innovative and even self-healing dynamics. This is what I call The biological foundation of living systems, or, within our context: The First Law of an Evolutionary Economy. It is the scientific foundation of a radically new economic paradigm. In fact it provides the foundation of a radical new theory of scientific management. Further I will describe how living systems operationalize these conditions into a coherent set of five Generic Principles. This enables us to design a new economic operating system that has strong implications for the necessary organizational culture and management model. Understanding the biological foundations of an evolutionary economy and the required operational and governing principles provides a new comprehensive framework for strategic decision-making, especially for Positive Impact Investors. And there is something more we can learn from living systems: how radical and deep transformation can happen quickly, securely and directly—far beyond any traditional and incremental change management approach and definitely far beyond experimentation.

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Acknowledgements

  • Antonin Pujos (member of the Zermatt Summit Foundation Board, co-initiator of the Declaration on the Common Good to Humanize Globalization, Founder and Past-Chairman of the Research Club of the French Institute of Directors (IFA) and member of The Dublin Group of the Centesimus Annus Pro Pontifice Foundation) for his imperturbable and inspiring believe in the Common Good as the orientation and final destination of our global economic, human and leadership development.

  • Jaak Panksepp (Professor of Psychobiology, Department of Integrative Physiology and Neuroscience and Founder ot the term ‘Affective Neuroscience’, College of Veterinary Medicine, Washington State University, Pullman, Washington, USA) for supporting and editing the neurobiological scientific foundations.

  • John North (Managing Director of the Globally Responsible Leadership Initiative GRLI) for supporting the concept of co-creation of shared value, the Common Good, being in the centre of an evolutionary economy and of a globally responsible leadership.

  • Katrin Muff (Dean of the Business School Lausanne BSL 2008–2015, until self-organization made such a title redundant and Founding Partner of the 50+20 collaborative Initiative to transform and reinvent management education) for inspiring and supporting the concepts of the Evolutionary Paradigm as comprehensive framework towards a Management Education FOR the World.

  • Menas Kafatos (Professor of Computational Physics, Director Centre of Excellence in Earth Systems Modeling an Observations, Schmid College of Science and Technology, Chapman University, California, USA) for reviewing the scientific foundations and supporting the publication of this article.

  • Robin Fraser (Co-author of ‘Beyond Budgeting’ HBP 2003 and Co-Founder of the Beyond Budgeting Round Table, BBRT.org) for having worked together in applying the Generic Principles of living systems on enterprise level.

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Sonntag, M. (2018). The Biological Foundation of an Evolutionary Economy and its Implications for Organizational Culture and Leadership: A New Framework for Strategic Decision-Making. In: Wendt, K. (eds) Positive Impact Investing. Sustainable Finance. Springer, Cham. https://doi.org/10.1007/978-3-319-10118-7_12

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