Growth, profit, and shareholder value are the cornerstones of today’s economic system, which according to Piotr Trojanowski have proven outdated, reductionistic and not sustainable. He proposes taking the cost of growth into account by using the concept of civilizational debt in agile transformations, and applying agile to realizing humankind’s mission through our work.
Piotr Trojanowski gave a talk about creating good companies with civilization debt and agile at XP 2023.
Growth, profit, and shareholder value span the prevailing mental frame of our understanding of business activities, as Trojanowski explained. Growth is the way to survive on the economic scene - if a company does not grow then it will be shortly made extinct by its competition, he said. Profit is historically recognized as a tool for escape into a better future and it enables growth, Trojanowski added. Shareholder value is a reflection of Adam Smith’s concept of self-interest as a tool through which societies as a whole can become financially richer, he concluded.
Trojanowski argued that this mental frame is irrational, destructive, and not sustainable:
Societies, governments and institutions have become slaves to this mental frame. The feeling that the mental frame is a trap is growing. If we do more of the same that we have been doing in the current mental frame of the economy, where does it lead us to?
According to Trojanowski, the growth equation "Profit Through Exploit" is partial as it does not take into account the cost of growth. We need to put the costs of growth explicitly in front of our eyes side by side with gains, he argued. He calls the missing component of the growth equation civilizational debt:
Civilizational debt is the bill for all the costs allowing the gains. The two main components are the ecosystem unsustainability and human disintegrity. It sums up the costs of everything bad and destructive that we generate as a side effect of generating profit in the race for growth.
Digital and agile transformations are limited in their wider impact, Trojanowski mentioned. There are levels of the mental frame that digital, technological, and agile transformations do not see, and do not alter; there exist residual obstacles to transforming companies towards becoming truly good companies, he said.
Trojanowski mentioned that the path to good companies, the ones that will drive us to a meaningful future, leads through redefining our mental model of the economy. The new frame has the shape of a typical iceberg, with companies’ behaviors as a visible layer and three underwater layers of logic that steer the behaviors:
We start by defining humankind’s mission and derive successive layers of its logic from it. First, we need to derive the societal meaning of business directly from humankind’s purpose. In the next step, we need to derive the mental model of the economy from the societal meaning of business. And finally, how companies behave will result from the mental model of the economy.
All that we do as part of agile transformations is still valid, as one might expect; we need to continue doing it, Trojanowski said. Agile transformations are a necessary condition for good companies. It is not in itself a sufficient condition though:
We have been working towards better companies, yet the old framing of the economy caused systemic issues with agile adoption that we observe.
We make agility valuable by adjusting its meaning to the evolving meaning of the work and the business activities itself, Trojanowski suggested. It is no longer the main goal of agility to be competitive, flexible in following market trends, and creating products that customers love; these aspects become part of the hygiene level. Agility these days needs to answer the question of how to be agile in serving the bigger purpose of realizing humankind’s mission through our work, he argued.
Is the new mission still a part of the agile movement, is it teal, or is it something that will have to be defined in the future? Let’s leave it to history to assess, Trojanowski said. Knowing the mindset of the worldwide agile community, there is a perfect match for this community to lead the next wave of how and why we work together in companies, he concluded.
