Funding Human Creativity
If you are a practicing Holistic Manager, you have completed your Holistic Financial Plan (HFP) by now. (It’s February.) You have considered log jams, adverse factors, financial weak links, and completed Gross Profit Analysis of your enterprises. You have planned your income and your profit. You have determined your stocking rate and capital expense plan. You have prioritized your expenses in order of importance.
Like many ranchers, I have the tendency to copy and paste expenses from the previous year rather than delve into the why of each expense—I dump last year’s expense into the new plan.
This habit of rote planning does nothing to empower decisions at the soil surface. The Holistic Financial Planning process asks us to consider how every expense supports our Holistic Context. It quickly becomes apparent that all expenses are not equal. Our human resources quickly rise to the pinnacle of importance. How do you determine your funding level for Labor and Human Creativity?
DUMPING OR DECIDING?
On our Twin Creek ranch south of Lander, WY, we worked with our University Extension Service on a fertilizer test. We wanted to better understand what fertilizer mix grew the most hay at the least cost. The alluvial draws and oxbows grew mostly cool season grasses and one field boasted 35 acres, with most being 6-8 acres. Not exactly farming at scale. The test trial suggested the best mix to be 30% nitrogen and 10% phosphorus. The point of diminishing returns tipped at 100 pounds of available nitrogen. And boy, did we grow hay. Some of the deeper soiled fields piled 5+ tons per acre.
I rode with Joe spreading fertilizer each spring. Joe kept a cigarette in his mouth and a beer between his legs as he told story after story, and they were never boring. He said it was great how I rode along and directed him to the better producing fields. He probably liked having somebody to drink beer with even better.
He continued, "I showed up at Bob's place on the Sweetwater River and asked him where he wanted me to spread the fertilizer. He told me to just dump it in a pile behind the barn. He said it's just an expense, a cost. So just dump it behind the barn." Joe laughed at the thought.
We have all been guilty of dumping expenses rather than deciding how to allocate for the results we want.
HUMAN CREATIVITY GONE AWRY
OK, maybe we weren’t simply dumping our fertilizer. Maybe we put more thought into spreading fertilizer than some. We did the test trial and focused on better producing fields. But we never got to the root of “Why,” we were fertilizing.
The last time Joe showed up with his fertilizer truck the inflationary 70's had tipped over into the deflationary 80's. We were sliding down the throat of what would become known as the Farm Crisis. Starving for cash, the fertilizer "expense" was cut. The addicted fields shriveled and peered up at our swather, with a hollow, blank-stare, gasping for life. Our fertilizer expense intending to grow more hay resulted in the unintended consequence of starving the soil. Without realizing it, we had addicted our fields to crack and they could not function without their annual injection of Nitrogen fertilizer.
Incentivizing Human Creativity can also result in unintended consequences. Daniel Pink's research demonstrates that incentivizing human creativity will backfire. Check out his TED talk here:
At the same time, his research suggests that rewarding labor will get results. Should we think about this difference in our Holistic Financial Plan? If we can’t effectively incentivize Human Creativity, how can we support this most important resource?
The Holistic Financial Plan can differentiate between the different aspects of Labor and Human Creativity. We have categorized our expenses to Maintenance and Wealth Generating. The difference being that our plan requires the maintenance expense to "maintain" our present level of profitability. While wealth generating expenses add equity to our financial, ecological or social balance sheet.
Labor or mechanical skills that do not require cognitive ability, do respond to incentivizing. Think of giving your child a nickel for every potato bug they collect. Efficiency improves because rewards narrow our focus. Maybe it’s as simple as planning a Maintenance Expense for the basic job, then, offer an incentive to add value as a Wealth Generating Expense.
Incentives will look different in each Holistic Context. One example might be a cowboy gathering and moving cattle. Cowboys can get ‘er done but may not care about monitoring plant regrowth, animal impact or utilization levels. If the cowboy can do these things well, we don’t need to drive out and retrace steps. The information will make us better at controlling the execution of the grazing plan and build triple bottom line capital as a result.
If they “Cowboy Up,” monitor and log results, they get an incentive.
PAY TO PLAY
Note that Labor and Money are together in the Holistic Decision Making Framework. Labor responds to incentive. Human Creativity sits by itself on the other side of the tools, reminding us that Human Creativity does not respond to reward. Incentives narrow the focus and Human creativity needs a broader view for possibility and conception.
But before we can get to the broader view, Pink points out that people must be paid enough so "money doesn't matter." People need enough money to secure their basic needs—food, shelter, and clothing. Psychological safety, as you read in a previous blog “Freeing Human Creativity with Psychological Safety,” will also be necessary to free the creative juices. With security and safety, the creative mind can come out to play.
Once basic needs are met, how do we incentivize creativity? Pink references a research project showing that across many cultural and economic diverse levels, creativity gets results when the following factors are met:
- Undiluted autonomy.
- Mastery of a skill.
How can we provide these?
WAR & PEACE
After nearly 30 years of Practicing Holistic Management, I became a Senior Regional Manager for Grasslands-LLC. I worked with 6 ranch managers and the business office. My background in Holistic Management brought an acute awareness of Human Creativity. The grandest plans, wildest hopes, and most noble dreams are but dust in the wind without a context grounded in the complexity of immediate space and time—Human Creativity at the soil surface. My inspiration came from General Kutuzov in Leo Tolstoy’s, “War & Peace.”
General Kutuzov commanded the Russian army to stop the advance of Napoleon’s invading French. Kutuzov’s philosophy of a battle was chaos and an unmanageable affair. He saw a complex series of on-the-spot reactions and improvisations by individual soldiers and officers being beyond his control once the battle began. Kutuzov realized it was supercilious to think one could control or manage such chaos.
This sounds a lot like the complex processes in financial, ecological and social systems. There is a war out there! Plants crowding for dominance, each expense crying out to get funded, people wanting attention and utter chaos. Such defines the task of a Holistic Manager—moving complex processes toward greater resilience. As you can see, this requires free-flowing Human Creativity. Back to Russia.
Pompous, self-important generals like Napoleon imagine that their decisions from on high determine the strategy and tactics of battles, but in fact, their orders can seldom be executed and are generally irrelevant: circumstances are too fluid. Heavy-handed perfection and control can snuff out: Creativity.
Kutuzov, on the other hand, knew from experience long before he became a general, that when you are overruled by higher authority, you shut down your mind, assume an air of compliance, and “go to sleep.” As a general, he felt his greatest responsibility was to keep those under his charge “awake.” He built morale among his troops by keeping them well fed, well-armed and well clothed. From there, he inspired.
Napoleon, on the other hand, controlled and ruled his soldiers. Unlike Napoleon, Kutuzov knew it wasn’t about him, a single ego. It was about mother Russia, his country, and his troops. Being a small part of a greater whole, he empowered his people.
AT THE SOIL SURFACE…
I was having a conversation with Nolan, manager for a 38,000-acre ranch in eastern Montana. Nolan had been on the ranch for about a year and was an inspiration in his energy and discipline to learn. Learning the practice of Holistic Management and demonstrating results on the ground, was central to our cause at Grasslands-LLC, which aligned with my purpose.
Nolan’s lanky frame and humble demeanor was Jimmy Stuart, up close and personal. We were discussing stocking rates for our year-end financial plan. Nolan looked up at me, sincere, “I just want you to tell me what to do.”
I began, “I can’t do that Nolan. You, your family, and your crew, own the ‘what.’ It’s your context, I won’t be here.”
I checked in with Nolan as I wrote this blog and asked for his feedback. He recalled the conversation. But as I left that day, he felt alone. Nolan can train and handle a horse as well as anyone I know. He drew on his experience for an analogy.
“When I’m working with a horse, they just haven’t ever done some of the things I’m asking. So, you kind of need to show them how.”
Fair enough. What is the “How?” of Holistic Management? I asked myself, “How I can better support Nolan and other managers’ autonomy?”
What brings autonomy? Grasslands-LLC intentionally monitored ecological, economic and social factors. To capture social well-being, Grasslands-LLC engaged with Life Energy, https://lifeenergy.guide, so we could monitor our individual and team well-being. Life Energy defines autonomy as “the extent that people feel free to do what they want, have the time to do it, and are largely in control of their own decision-making.” To do this, one needs knowledge, skill, and confidence.
PRACTICING THE PRACTICE OF HOLISTIC MANAGEMENT
As mentioned earlier, mobilizing creativity boils down to 1) undiluted autonomy, 2) developing a skill, and 3) purpose.
The ranch’s Holistic Context provides WHY. We all want profitable resilient social, economic and ecological systems that support our quality of life. By owning the ranch’s Holistic Context, the decision makers, including management and crew, have PURPOSE.
As Nolan pointed out, when someone is new to something, we kind of need to show them “How.” The how in Holistic Management begins unfolding as we ask, “How must we behave to create our desired future resource base?”
Holistic Management practitioners live in this space between our Whole Under Management, or the reality of our situation today, and our desired future. That future includes live water, vibrant grass, healthy animals, happy children, nutritious food, good schools, maybe a theatre and a quality retail store. We want a place where we can be warm, dry, learn and grow and be secure in our space. We just need to take responsibility in knowing that our behavior has a lot to do with where we find ourselves today and where we will be in the future.
This calls for pure, unadulterated accountability—no room for blame here. Ask, “How must I behave?”
In Holistic Management, we ask, “How do I know my proposed action will not create unintended consequences?” We use the testing questions or context checks, e.g. Cause and Effect, Marginal Reaction, etc.
In Holistic Management, we ask, “How do I implement an action that passes the testing questions/context checks?” We include the action in the planning processes.
- If it needs funded, get it in the Holistic Financial Plan.
- If it involves infrastructure, get it in the Holistic Land Plan.
- · If it involves process, get it in the Holistic Grazing Plan.
· If it involves information, get it in the monitoring plan.
And then, the “How” comes down to execution. I can help managers monitoring residual cover, plant recovery periods, re-growth, cash flow, gross profit, social weak links, etc.
The HOW is practicing the practice of Holistic Management. The good news is that there are many who can help learn and implement the HOW.
But, we can’t tell you WHAT to do. That decision lies with the person in real-time at the soil surface.
To recap, getting returns from Human Creativity means:
- Providing mental bandwidth: food, shelter, clothing, cash in the bank, and psychological safety.
- Allowing time for their family, friends, and meditation or contemplation.
- Being equipped and supplied, such as electric fence, water tanks, trucks, trailers, and tack.
- Inspiration, which comes from our Holistic Context, our purpose, or the Why.
- Mastering a skill- Learning How to Practice Holistic Management.
- Finally, they need autonomy- Having the knowledge, skill, and confidence to feel free, have time, and be in control of their own decision-making. There must be a trust so people are moving toward freedom and not toward safety.
With purpose, skill, and autonomy, we release creativity and empower decisions at the soil surface.