The Power of Words

The World According to Flores exists in three realms. The first is the smallest -- and the most self-limiting: What You Know You Know. It is a self-contained world, in which people are unwilling to risk their identity in order to take on new challenges. A richer realm is What You Don't Know -- the realm of uncertainty, which manifests itself as anxiety or boredom. Most things in life belong to this realm: what you don't know about your future, your health, your family. People are always trying to merge this second area into the realm of What You Know You Know -- in order to avoid uncertainty, anxiety, and boredom. But it is the third realm of Flores's taxonomy to which people should aspire: What You Don't Know You Don't Know. To live in this realm is to notice opportunities that have the power to reinvent your company, opportunities that we're normally too blind to see. In this third realm, you see without bias: You're not weighed down with information. The language of this realm is the language of truth, which requires trust.

As Flores practices it, transformation requires that you risk your current success -- What You Know You Know -- in order to join a more satisfying game. It allows you to enter the realm of freedom. But to get there, you have to shock your system out of its arrogance, blindness, and complacency. Since all action is based in conversation, the shock has to come through language.

This is Flores's realm, his gift, his invention. What Peter Drucker did for organizations, Fernando Flores is doing for individuals. Before Peter Drucker, there was no science of management. Before Fernando Flores, there was no science of organizational transformation. Flores has defined the terrain, drawn the maps, created the language -- and built the rocket ship to take you there.

The Journey of Transformation

Fernando Flores is . . . who? This is not a simple question. A magician of transformation, he is in a perpetual state of flux. Flores lives according to his own theories of language. When he speaks, he makes a commitment. If he says that he will phone you on Saturday at 9 a.m., you can set your watch by the ringing of the phone. He trusts people to be as truthful with him as he is with them; most rise to the occasion. His ambition is not to make more money: He's worth $40 million. His ambition is not to conquer hearts: He cares only for the approval of his family and his clients. His ambition is to live every moment to the fullest and to help others to do the same -- which is why so many people say that Flores has changed their lives.

It's a lesson that Flores learned the hard way. In 1970, at the age of 29, he was named Chile's minister of economics -- becoming one of the youngest men in the country's history to hold that post. Later he was named minister of finance -- at a time when the country was undergoing its own transformation, from dictatorship to democracy. That transformation, however, ended abruptly in 1973, when Salvador Allende, the democratically elected president, died in a bloody coup. Flores was one of the cabinet ministers who fought Augusto Pinochet's fascist forces to the bitter end. Flores was imprisoned, subjected to mock trials, and punished with solitary confinement. For three years, he was separated from his wife and five children. Many Chilean intellectuals were reported to have "disappeared." Flores, for some reason, attracted the attention of Amnesty International, which helped to negotiate his release from prison in 1976. Being in prison changed his life: He emerged from jail with a new vision, a new understanding, and a new commitment to the fundamental connection between language and action.

"When I left prison, I had to figure out how to embrace my past," Flores says. "Those three years represented a tragedy that I used to re-create myself, not something that was done to me. I never blamed Pinochet, or my torturers, or external circumstances. I feel 'co-responsible' for the events that took place. I never told a victim story about my imprisonment. Instead, I told a transformation story -- about how prison changed my outlook, about how I saw that communication, truth, and trust are at the heart of power. I made my own assessment of my life, and I began to live it. That was freedom."

In 1976, nearly broke, Flores came to the United States. In 1977, he began a PhD program at the University of California at Berkeley, drawing together several fields: the philosophy of language, computing, operations research, and management. He found himself drawn to the work of Martin Heidegger, a German philosopher whose dictum "Language is the house of being" defined for Flores the link between words and the self. From Heidegger, Flores learned that language conveys not only information but also commitment, and that people act by expressing assessments and promises. Computers, he concluded, would be more effective if they recorded and tracked commitments, rather than simply moving information.