A blog by Martin Erasmuson.
In my previous blog I proposed organisations are OK being 'adaptive' and 'agile' with their IT Architecture and Business Processes, but seem reluctant to consider organising their people in any way other than a traditional line-management structure. If you ask about that the response if often ‘that’s the way we do things around here’, and neither a rapidly changing business environment nor consistent failure seems sufficient to drive different thinking about how they organise and support their most valuable asset, their Human Resources.
Thomas Kuhn describes this in his book: ‘The Structure of Scientific Revolutions’, where he suggests “there is one thing that [organisations] consistently never do when confronted by even severe and prolonged failure. They will never renounce or even question the overarching [HR] model on which they operate”. In traditionally structured organisations, even in the face of consistent, repetitive and severe failure, they will doggedly maintain, even reinforce their existing Command and Control structure and unwavering reliance on Best Practice represented by the ‘Org-Chart’ or traditional Project Team.
If we analyse what is generally meant by ‘Best Practice’ it largely translates to: 'stuff that worked OK in the past that we intend reusing now with the intention of achieving the same outcome in the future’. Like my wife's ‘Brownie’ recipe given her by her mother. It works every time.
That Best Practice approach is predicated on an unchanged business environment with the same drivers and inputs, the same goal or outcome and comparable plan for getting there. But what to do when something has changed? Different, disruptive business drivers? Organisational aspirations for broader or different outcomes? How does an organisation create the capability and capacity to identify and respond to self-driven strategic change and/or the constantly changing business environment they now find themselves operating in?
In tackling that question some folk within organisations resort to ‘Skunkworks Projects’, small teams which form, occasionally with, but frequently without the knowledge of senior leadership. By definition, a Skunkworks Team operates outside the organisations ‘normal’ procedures, polices and chain of command, and thus, tend to be unburdened by the organisational culture that typically stymies new ideas. Skunkworks is 'Innovation by Exception'. They might be effective in creating ‘new stuff’ but that is usually a one-off and invariably encounters challenges when it comes to integrating the new innovation back into the existing structures, processes and culture of an organisation still engaged in business as usual. More often than not, that fails and the status quo remains e.g. in the 1970’s IBM engineers are credited with ‘inventing’ the personal computer (PC) but it was never seen as a valuable idea within the wider company.
Commentators like Steve Blank suggest "to survive, organisations need innovation by design”. So how do organisations do that? What are the different skillsets, policies, approaches and organisational frameworks necessary for innovation to become embedded into organisational culture? There are several approaches, methodologies and disciplines that are well suited to dynamic, uncertain business environments and in my view organisations and their people can learn, become skilled in and apply those skills as easily as any of the traditional, best practice approaches they are currently familiar with. I was initially tempted here to describe these as ‘Next-Best-Practice’ but that implies the current practices are wrong or obsolete and the 'shiny new thing' is some panacea for all organisational woes. That mode of thinking i.e. applying our favourite tool, methodology or structure to any business problem lies at the heart of the problem. As Alina Dizik points out in my first blog, every organisation has access to an array of technology, skills, methodologies and organisational arrangements. What is missing is an appreciation of what to use and when to use it. In relying solely on a particular approach/tool/structure you are effectively “Taking a problem to a person with a hammer; i.e. the solution will be a nail” (Attributed to Steve Dol).
By way of example, penicillin was discovered in 1928 by Scottish scientist Alexander Fleming and in the years following WWII, penicillin was touted as a ‘wonder drug’ that could not only “kill infections, but also prevent baldness and tooth decay”. In his book ‘Penicillin Man’, Kevin Brown says there was even penicillin lipstick for those concerned about ‘hygienic kissing’! As ludicrous as that sounds today, most organisations remain fixated on execution, with a multitude of best practice methodologies and organisational structures in support which they doggedly apply to every situation, regardless of context. As Thomas Kuhn (et al) describes, they may understand the result was not what they wanted or expected, but never seem to review or question the approach they used to achieve it.
I often get asked about these tools, approaches, methodologies and organisational frameworks I allude to with 'what are the best'? But that would be like asking a builder 'should I use a hammer'? To which they might respond: 'If you want to bang in a nail; yes'. Before we decide upon a particular methodology, tool or approach (Best Practice or otherwise) we need to unpack, examine and understand the business problem we are dealing with. i.e. understand the symptoms and reach a diagnosis before prescribing the treatment i.e. we now know that penicillin is good at fighting infection but as a cure for baldness it probably won't cut it (pardon the pun).
In diagnosing a particular business problem I always start with quantifying the complexity of the problem at hand. A simple approach for doing that was developed by organizational theorist and Professor of Management Ralph Stacey. His ‘Stacey Matrix’ (below) establishes a conceptual framework for understanding complexity in decision-making and, by extension, for choosing what approach is best suited to a particular problem.
In the Stacey Matrix along the bottom axis we move from being close to certainty to being far from certainty; the other axis, similarly describes agreement.
Rational Decision Making: At a point close to certainty and close to agreement is a ‘Rational Decision Making’ environment. This is characterised by strong cause and effect relationships, high levels of certainty and agreement about the nature of the problem, the intended actions and expected outcomes. When confronted by problems that conform to those parameters, it is appropriate to take a Rational Best Practice approaches. When business problems are not consistent with those Rational-Area criteria, different decision-making practices; indeed planning, policy, approaches, implementation methodologies and organisational frameworks need to be applied.
Political and Judgmental Decision Making: At a point closer to certainty but further from agreement political decisions occurs e.g. there are two clear and well understood options, someone with appropriate authority makes a decision. Conversely, at a point closer to agreement but further from certainty, judgmental or intuitive decision-making practices occurs.
The Edge of Chaos: As you approach a point far from certainty and far from agreement you reach a zone of chaos where organisational structures of any sort break down and progress is almost impossible. Think: Syria, Yemen and Eastern Ukraine.
Complex Decision Making: Between the zone of rational decision making and anarchy is a zone of complexity. In this complex decision-making environment, links between cause and effect that may have been obvious in the Rational Decision-Making area are now unclear. Undifferentiated problems present themselves, there is typically disagreement and uncertainty about the nature of the problem, (sometimes even if there is a problem), intended actions, and expected outcomes. This is where most organisations trip up in applying Best Practice.
Most Best Practice typically relies on high certainty/agreement, strong cause/effect relationships with complete, high-quality data. In reality, today’s dynamic, fast-changing business environment is better described as ‘little is known and much is assumed’. Despite this we’ll revert to our Best Practice Project approach which invariably treats assumptions as facts rather than as best-guess estimates to be tested and questioned. Here in New Zealand, evidence-based thinking is now applied to every area of Public Policy and this has flowed into Best Practice decision making rituals and execution methodologies that are applied indiscriminately to every situation; like penicillin was in the years following its discovery. While Best Practice may be practical and appropriate in a Rational Decision-Making context, they are invariably doomed to failure before they start because 1) the facts underlying the intended approach are invariably assumptions and 2) the approach is simply not capable of responding in a timely manner to the fraught, uncertain dynamics of complexity.
If we consider failed attempts in the 1950s at using penicillin to cure baldness, where was the problem? With the drug, or its flawed application? The Stacey Matrix; exquisitely simple as it is, can be a good starting point for organisations to first ‘diagnose’ the complexity of the problem or business environment they are dealing with, before deciding on an appropriate approach. And like penicillin, let’s stop throwing our favourite Best Practice 'thing' at everything and hope that something sticks. In reality there is no single approach for successfully responding to the complexities of a continually changing business environment. That requires first an understanding and acceptance of that fact i.e. ‘we are in a constantly changing business environment’. Next is an understanding and appreciation of various organisational dimensions: people, processes, information and technologies that can be adapted to respond to the problem at hand. So perhaps, after all, the classic ‘org-chart’ has a reprieve! Perhaps there is a place for such a structured approach for those more straightforward ‘Rational’ business tasks; but that needs to be layered with other structures when approaching complexity. When push comes to shove, people are flexible. I’ve seen individuals operate as part of an agile, discovery-based team for part of their week, and then in a traditional line-management role at others.
In my next blog, "Is the org-chart dead Pt III", I'll explore some of the tools and approaches organisations might consider adding to their repertoire, not as a replacement for, but in addition to their existing Best Practice tool-set. Such an approach promotes the resilience that every organisation needs if it is to survive and prosper. In the meantime, just for curiosity, perhaps assess one of your current 'problem-child' projects against the Stacey Matrix and determine where it fits. If the symptoms include low agreement/certainty then by definition the situation is complex; and you might be using a hammer, when you should be using a saw, or screw-driver?