Thus far we have been making the core argument that the levels of consciousness and performance—personal, organizational, and systemic—are harmoniously related. We have argued that your business will be structured and perform at the predominant level of consciousness of its leadership, through which all leadership, culture, organizational structure, action, and creation are being organized. This is a greatly overlooked truth. If we want to perform better, individually and organizationally, we must be restructured. With each fundamental evolution in the Structure of Mind (IOS), more, much more, becomes possible.

The good news about this is that the Level or Structure of Mind can evolve. There is a considerable amount of good research in the field of Adult Development that has mapped out the entire trajectory of development—how consciousness structures itself at one level of mind and then restructures itself into the next higher-order structure, and the next, and the next. This chapter is a brief introduction to the Stages and Structures of Mind, how they are integrated into the Universal Model, and their relationship to leadership effectiveness and business performance. In the next chapter, we will describe each Structure of Mind and Stage of Leadership.

Bill: We have spent 30 years working on what is required for systems to transform in order to enhance performance and create a level of leadership that is a competitive advantage. I was first introduced to Stage Development research in my PhD program. However, until I started working with the Leadership Circle model in 2005, I was missing a major link. The integration of the Stage of Development framework into the LCP and the Universal Model provides a pathway for leader development that can be scaled with tangible results. This framework integrated our Whole Systems transformation work and greatly enhanced our ability to support shifts in culture, engagement, and performance. When used within a Whole Systems approach to develop the leadership system of an organization, it is the most powerful source for cultural change I have found.

Multiple studies and our experience with companies engaged in transformation efforts show that 70–85% of them do not yield tangible results. This is because we have not understood the profound transformation required of everyone, especially leaders, when we try to re-envision and reinvent the organization for higher performance. Many well-intentioned improvement efforts and transformation initiatives fall short of intended results because leaders fail to account for the transformation in consciousness required to create and sustain high performance. Organizations do not transform—people do. Only by operating from a higher order of consciousness can we lead transformations that produce short- and long-term shifts in performance.

The Stage Development framework explains much that has been missing in the field of Leadership Development. Many great researchers on leadership, from Warren Bennis to Jim Collins, readily admit that while they can describe what great leaders do, they do not know how great leadership develops. The Stage Development framework helps explain how extraordinary leadership develops and how to accelerate its development. Yet, Stage Development is still not center stage in our thinking or the practice of developing greater leadership effectiveness. It has been incubating on the sidelines of the leadership conversation in the field of Developmental Psychology, and is just now finding its place in Leadership Development.

STAGES OF DEVELOPMENT FRAMEWORK

If you agree that individual and collective leadership effectiveness correlate closely with business performance and that developing leadership is a strategic imperative that must be owned and led from the top, then you must understand how development happens. Otherwise, you are apt to under-design and under-invest in the Leadership Agenda. You risk developing the effectiveness of your leaders in ways that do not result in sustainable performance improvements. The Stage of Development framework, when integrated into the Universal Model of Leadership, provides what has been missing in our efforts to develop more effective leadership. Progressively higher Stages of Development enable progressively higher leadership effectiveness and business performance.

We first encountered the Stages of Development framework through the work of Robert Kegan (Kegan, 1998), and it is a good thing we found him first. Otherwise we might have missed how Adult Development integrates the field. Kegan's particular model is the best we have found for integrating the entire field of leadership and organizational development. There are many other good models (Cook-Greuter, Torbert, Beck, Wilber, Gilligan, Hall, etc.) and all of them describe the same trajectory of consciousness in different ways and focus on different aspects of development. All these models can be tied to, or integrated into, Kegan's framework, but his framework is uniquely structured such that most of the good theory and research in the field of Leadership and Organizational Development, Psychology, Self-Help, Success and Human Potential, and even spiritual literature, can find a place within the structure of Kegan's Developmental Framework.

In Bob Kegan's five-stage model, the first stage includes all stages of childhood development. Kegan called the second stage Self-Sovereign Mind (Kegan and Lahey, 2009). We call it Egocentric as it describes an adolescent level of development. The other three stages (the heart of his framework) describe progressive stages: Socialized Self, Self-Authoring Self, and Self-Transforming Self. In the Universal Model, we modify Kegan's labels in order to integrate with other leadership frameworks. We call these three stages Reactive Mind, Creative Mind, and Integral Mind, respectively (see Figure 4.1). Each stage in succession is more mature than the prior stage. We have added another stage (Unitive) to include the higher stages described by spiritual traditions. Hence, our Universal Model includes five stages: Egocentric, Reactive, Creative, Integral, and Unitive.

THE UNIVERSAL MODEL OF LEADERSHIP

As we show how these Stages of Development are integrated into the Universal Model of Leadership, we will introduce some of our research with the Leadership Circle Profile and show how it relates to the real world because the metrics are strong and the research is breakthrough.

The LCP 360° assessment is a unique lens through which to do research. It is the only one that measures both behavior and beliefs at various stages of development, and it is the only one built on an integrative, universal, meta-model of leadership. Hence, our research yields provocative and profound understandings about what makes for effective leadership and how it develops.

Figure 4.2 shows how the Universal Model and LCP are drawn in a circle. The LCP displays 360° feedback results in a circle. The circle, as depicted in the LCP, is a complete rendition of the Universal Model (see Appendix 1 for definitions of all dimensions). As we will see, displaying the model (and results) in a circle has unique advantages.

Kegan's Stages of Development framework forms the backbone of the Universal Model of Leadership. Since most adults inhabit the stages of Reactive and Creative, with a small percentage at Integral, the LCP was designed to include the Reactive and Creative stages primarily, and point to Integral. In the Adult Development literature, when we transcend from one level to the next, it is called Vertical Development. Therefore, the vertical axis of the Universal Model, and of the LCP, represents Vertical Development—Stage Development (see Figure 4.3).

Figure 4.3 shows how The Leadership Circle and the Universal Model map the stages of development. It is important to note that the LCP does not measure Stages of Development since that is a more complex undertaking than can be accomplished in a 360° assessment. However, the LCP is built around the stage framework and correlates to measures of stage. It is designed to measure 1) leadership behaviors and the internal assumptions that run those behaviors at the Reactive and Creative stages of mind and 2) aspects of the Integral mind; however, since only 5% of leaders function at this level, the top half of the LCP is labeled Creative, the bottom half, Reactive.

CORRELATION CONCLUSIONS

To see how the Stages of Development relate to leadership effectiveness and business performance, we conducted a study in conjunction with the University of Notre Dame's Mendoza College of Business Stayer Center for Executive Education. The Stayer Center's approach to developing leaders is at the forefront of the field. Their Executive Integral Leadership (EIL) program is based on the Integral Model (Wilber, 2000) that incorporates Stages of Development. EIL is a profoundly impactful program. Because of our long association with Notre Dame, it made sense for us to conduct research together. We constructed a study using the LCP and the Maturity Assessment Profile (MAP), developed by Susanne Cook-Greuter. At the time, the MAP was the most psychometrically sound measure of stage available in a paper and pencil assessment.

We administered both assessments to 90 leaders. The results were groundbreaking. The correlation between the measure of Stage of Development (as measured by the MAP, which is a sentence completion self-assessment) and Leadership Effectiveness (as measured by the LCP 360° feedback scores) was surprisingly strong at .65.

Figure 4.4 shows the line of best fit between the MAP's measure of stage and Leadership Effectiveness scores on the LCP. We see that with each progressive stage of a leader's development, effectiveness increases dramatically, especially in later (higher-order) stages where the curve becomes exponential.

The implications of this study are profound. It strongly suggests that a very large component of a leader's effectiveness is the Stage or Structure of Mind out of which the leader is operating. In short, the entire argument of the first section of this book is strongly substantiated—that a leader's effectiveness is greatly influenced by the Stage of Mind through which the leader is operating: consciousness and competence rise together, the inner game runs the outer game, mastery is related to maturity, and extraordinary leadership is well-honed capability arising on a higher-order platform of consciousness.

We then looked at this same data a different way. We asked, “What is the average level of Leadership Effectiveness at each progressive stage?” We found a provocative picture of the relationship between Stage and Effectiveness, as depicted in Figure 4.5.

Those leaders who had measured at the Reactive level on MAP had an average Leadership Effectiveness score on the LCP at the 40th percentile (higher than only 40% of our worldwide norm base of a half million scores). In other words, those who measured at the Reactive Structure of Mind had Leadership Effectiveness scores 10% below the worldwide average and below 60% of the managers in our norm base. The average LQ for this group was .67, suggesting that their ineffectiveness is a competitive disadvantage.

Leaders who measured at the Creative level of development had average effectiveness scores at the 65th percentile—higher than 65% of their peers worldwide. The LQ for this group of leaders is 1.9, suggesting that their level of effectiveness provides a strong competitive advantage.

The highly evolved leaders who measured at the Integral level had average Leadership Effectiveness scores at the 90th percentile and their LQ scores averaged 9.0!

When we added this study to earlier ones, we reached a game-changing conclusion: not only is Leadership Effectiveness highly related to Stages of Development, but business performance is strongly correlated to Leadership Effectiveness. Taken together, these two studies strongly suggest that the performance of an organization depends highly on the level of consciousness of its leadership.

Consciousness is the deep structure, the operating system, of performance. With each evolution in consciousness (IOS) comes greater capacity, capability, and mastery to meet complexity with greater effectiveness. This conclusion is validated by our research and backed up by our work with senior leaders. The level of consciousness begets the level of performance.

TRAJECTORY OF LIFE-LONG DEVELOPMENT

The premise at the heart of the Universal Model of Leadership is that consciousness can evolve into higher-order capacity to meet complexity—development proceeds from lower to higher-order Structures of Mind through a series of well-mapped stages. Many psychological researchers (Piaget, Kohlberg, Gilligan, Lovinger, Maslow, Hall, Fowler, Jaques, Beck, Torbert, Cook-Greuter, Kegan, Wade, Wilber, and others) have described a series of progressive stages as we move from infancy to mature stages of moral, ego, and spiritual consciousness. Remarkably, these many theorists, through independent research, arrived at similar stage descriptions. The world's great wisdom traditions have also described the same sequence of stages for centuries.

CHILDHOOD: SEEING DEVELOPMENT THE EASY WAY

The best way to understand and witness Stages of Development (Vertical Development) is to start with childhood development. A child's development proceeds rapidly. Those of us who are parents or who have spent any time around children know how dramatically and rapidly their minds evolve. In a few years we watch the child morph from one operating system to the next. The changes are obvious, sequential, and substantial. Just as we figure out how to relate to our child (at any age or stage) they move on, and we must learn how to relate to them all over again.

At age five, children live in a magical world, a Disney World reality, replete with Santa Claus, tooth fairies, and imaginary friends. Santa Claus can go around the world and drop off gifts to every child on Earth in one night! Things magically appear, disappear, or turn into something else altogether. In this imaginary world, anything is possible.

While this magical world is a beautiful operating system, it is not well adapted to the demands of adult life, so, as parents, we involve children in a curriculum of development including school, sports, and hobbies. By the age of 10 their favorite book is the Guinness Book of World Records. The magical world fades away, and Concrete Operational Thinking boots up. Now they know the truth about Santa Claus and are surprised that this myth ever made sense. The world they live in does not morph and change. Things have stable length and measure, and they are intrigued by the largest, smallest, most, and tallest. They want to figure out this new reality.

We start the discussion of adult and leader development with childhood development for four reasons. First, childhood development is more obvious, and it is easy to see how each new stage brings with it new capability. In leader development it is harder to notice, but each stage brings with it new capability to meet complexity. Second, it is easier to notice that all stages are necessary, good, beautiful, worthy, and dignified. We would never make our five-year-old feel bad for thinking and acting like a five-year-old. This is easy to accept with children, but not so easy to accept with adults. Third, it is easier to see that the stages are sequential. This is obvious in how children develop. Magical thinking precedes operational thinking. We do not expect a five-year-old child to do calculus. There is an order and sequence to stages of development. Each stage develops out of the previous stage and into the next stage. This sequential order is built into the way the human body-mind is designed. Each stage is inevitable: we must grow into it, and eventually beyond it. Fourth, it is easier to see how at each stage transition something is being lost and gained. As parents, we applaud the development of our nine-year-old because the child is now more adapted to the demands of adult life, but we grieve the loss of our five-year-old because those beautiful, magical days are gone. The gain and loss we feel as parents provide a clue about how development proceeds. With each developmental evolution, the old operating system (the way we know ourselves and our reality) is being deconstructed. It comes apart so that a more effective operating system can be reconstructed.

Development is a disintegration–reintegration process. It is Metanoia and metamorphosis. There is loss and gain with each progression. At each developmental inflection point, we are challenged to let go of old ways of knowing before new ways of sense-making have booted up. This is destabilizing. Consequently, these transitions, in childhood and adulthood, are often hard. We tend to resist them whether we know it or not.

Bob: My teenage son, Scott, recently told me about a conversation that he had with his best friend. They concluded that they were happiest when they were five years old. When I asked Scott why they felt that way, he said: “Dad, when we were five, we were not self-conscious. We were freely ourselves in every moment, and we did not care what other people thought about us. Now we are constantly trying to measure up, to be somebody. We worry about what we look like, how we are dressed, and how we fit in with the other kids at school. It's hard. At age five, none of this mattered. I miss being five years old.”

I, too, miss my five-year-old children; however, I am glad that they are growing into a maturity that will serve them well in their adult lives. At each transition, we are losing ourselves and gaining a new self. This disintegration–reintegration development pattern occurs many times as vertical development proceeds. As children, we have little choice. We are born into an adult world, and we are in that adaptive challenge until we evolve our IOS to a level that adequately meets the everyday challenges of adult life.

Development beyond the norm is less common for two reasons. First, development is hard-earned and often resisted. Second, development into what is normative reduces the adaptive tension that stimulates development. Consequently, most adults do not progress beyond what is normative—the Socialized, Reactive Mind. As a result, development in adults is not so obvious.

IDENTITY IS AT THE CORE

Kegan's research primarily focuses on how the ego's Identity restructures itself from one stage to the next. Other researchers focus on other sequential aspects of development (moral reasoning, decision making, values, emotional intelligence, cognitive complexity, spirituality, etc.). As one Stage of Development evolves into the next, many aspects of consciousness are evolving. We focus primarily on one aspect—identity—but other substantive things are evolving in parallel at different rates.

Identity is what we use to construct our self-understanding, our concept of self. We build different constructions of identity at each progressive Stage of Development. At each stage we are identified with that way of being. We say: “This is me. This is who I am. If I am not this, who am I?” When we are identified with something, we are that something. It defines us. We measure our self-worth and maintain our security by being that something. That something is so fused with our self-concept that it is indistinguishable from ourselves. We “mis-take” it for ourselves. Of course, the something with which we are identified is not who we actually are, but it sure seems to be that way.

Identity is often referred to as ego because it defines who we are, organizes much of our behavior, moment to moment, and drives the core strategies that we use to establish ourselves in the world (see Figure 4.6). Identity is at the core of our IOS—the part of the IOS that harbors our sense of self, organizes how we understand ourselves, and how we establish our sense of self-worth, self-esteem, personal value, and security. Identity drives how we take up our role in situations and how we deploy ourselves moment to moment. The structure of identity is responsible for mediating much of our thinking and behavior. Therefore, we generate patterns of results consistent with how our identity is structured. When identity evolves, so do we, as do the results we get in the world.

In the Universal Model of Leadership, identity is at the core. If it evolves, identity restructures itself into more mature operating systems. Each progressive evolution enables increased capability to handle increased complexity.

In the core of the LCP is a black dot with the word “identity.” The profile is designed to measure leadership behavior that derives from progressive stages of identity. The Universal Model of Leadership tracks the evolution in identity as we transform from one stage to the next.

Leadership is the deployment of self into circumstances. Since identity is the core of how we understand ourselves and the world, it manages how we deploy our leadership in every situation. Structure determines performance. The structure of our identity determines how we show up as a leader, how we deploy ourselves into circumstances. Hence, as our identity transforms, so does our leadership. All things change when we do.

In the next chapter, we will describe how identity evolves as each progressive Structure of Mind is constructed, deconstructed, and then reconstructed. We will show how each progressive stage relates to leadership effectiveness, organizational structure, culture, and performance.