As the attached picture points out, complexity offers a perspective shift.
Current management perspectives seek to shift organisations forward by seeking root causes to the problems they think are holding them back and fixing them. This is an optimal approach in a manufacturing environment. However, more economic activity is performed in services (my area of focus), where production and delivery occurs in the same (or nearly same) moment. This obscures root problems as they are often located at the level of people. So what can be done?
Once approach is for HR to be the psychology department; managing each person’s level of engagement, motivation, skill-alignment, and performance. But not only does this place a massive burden on HR (and I’ve met many exhausted ones over the last year!) it’s an impossible task. People have multiple identities they rapidly switch between. HR can never be certain which identity they’re dealing with and whether their interventions are sustainable.
Furthermore, how practical is a management strategy based on the idea that you can change people into what you want or need them to be? How many of you have had a personal relationship with someone who you wanted to change in some way? How did that work out?
The complexity perspective lets leaders move away from a purely ‘search and fix’ mentality and adopt an ‘explore and exploit’ approach as well. For in the deeply tangled web of the modern organisation problems and opportunities are part of the same complex day-to-day reality. So instead of trying to engineer your means of production (people), like manufacturers do to their machines, adopt the more human approach of a complexity mindset to work with people on discovering opportunities that impact throughout the organisation in sometimes surprising ways.
In other words, start working with how things really are, rather than how you’d like them to be.
But be warned: once you cross the complexity-Rubicon you don’t go back.
Embracing complexity means working with inherent uncertainty rather than trying to engineer it out. The act of doing so can help leaders discover and exploit new opportunities.
The Magic Roundabout in England (pictured) is an example of how complexity was embraced to design one of the most effective traffic management systems in the country.
The roundabout has five outside roundabouts going clockwise (the right way in the UK), while the middle roundabout goes anti-clockwise. There are very few guide for navigating it beyond a few lines on the road: there are no traffic lights and no road-side signs. So why does it work?
A roundabout was originally sketched out to meet the demands of a very busy intersection: junctions leading to motorways, the centre of a nearby town, a hospital, football ground, and even a route to protect a grade 2 listed building. Yet, rather than settling on one configuration the designers embraced complexity to create a design that’s successfully been in use for over 40 years now.
When the roundabout was first opened to traffic its lines were not permanently marked out. Police officers were stationed at each mini-roundabout to observe how drivers navigated it. As patterns of driver activity emerged adjustments were made to support those that were beneficial (that kept traffic flowing) while negative pattens (creating bottlenecks) were dampened.
The result was a design that works with how people drive safely, rather than trying to impose safety through rules. The design - by the novelty factor and an absence of conventional markings - forces drivers to slow down and become more aware other surroundings: they give way to cars already on the roundabout, keep inside the lines on the road and avoid collisions.
The roundabout puts the emphasis on safe and effective decision-making on the drivers rather than distant designers. What this produces is ‘emergent behaviour’ - people responding to what’s really happening as opposed to having their action planned well in advance.
The result is that the roundabout sees very few accidents, (as cars go very slow) and no traffic jams, even in rush hour (as there are multiple ways to navigate it, which people learn as they become experienced driving through it) the entire system is more effective for everyone.
For those - like me - who live in cities with horrendous traffic problems, caused by the type of centrally-planned traffic management ‘solutions’ parodied in the picture of the art installation below - the attraction of embracing complexity for discovering new options, rather than trying to design it away for the sake of centrally-planned order, becomes obvious.
Managing complexity requires a new mind-set.
In complex systems patterns of behaviour emerge through interactions between people and surroundings that can rapidly escalate if they find reinforcement. This is why a peaceful crowd can turn into a hateful mob in seconds. These shifts are also often difficult to predict beforehand.
Fortunately the reverse is also true. Crowds can also be 'wiser' than any person within it. This phenomenon was proven 100 years ago at a farmer's market in England and has been used since by Nobel peace prize winners to help the poor. Simple constraints make it work, but the phenomenon is consistent.
The 'wisdom of crowds' matters because all of us - regardless of who we are - are subject to mental biases that distort the information we take in. For example, count the number of F’s in the following text:
“Finished files are the result of years of scientific study combined with the experience of years.”Three?
Actually there are six F's here. This isn't a brain failure - there are evolutionary reasons why we don't see everything - it's cognitive bias and highlights the importance of taking many perspectives before acting.
For managing complex systems requires learning how to spot weak signals of emerging trends as early as you can. If you detect positive signals early enough you can amplify those and ride that wave ahead of your rivals. While negative signals can be quickly disrupted before they become threats that overwhelm you.
Tapping the wisdom of crowds may be the smartest decision leaders can make today
Students of business history know to take car companies seriously. The era of scale economies was ushered in by a car company - Ford - on its innovative assembly line. While economies of scope were unleashed by another - Toyota - with its equally innovative total production system. So, has Lotus - a British sports and racing car company - just signalled the rise of the the next great step in the evolution of business?
The high-end car market is fierce and Lotus’ new CEO can only afford to innovate frugally - improve without investing. He asks ‘for all three existing car models to be broken down into their parts and laid out on tables and asks all 900 company employees to tag the parts using a traffic-light system: keep, renegotiate supply/redesign, or discard. This ensured everyone understood why these changes were being proposed and resulted in weight savings of 10% and £3,000 from the components bill. It also led to the overall quality of the cars being improved’ (1) and this was all achieved without an expensive re-design of the cars themselves.
Why does this have the potential to signal a radical new breakthrough in business?
Speed and flexibility drive competitive advantage in rapidly changing and unpredictable markets. Resource intensive major projects with long lead times and even longer pay backs are increasingly harder to justify. But this doesn’t mean organisations need to go into defensive mode, just protecting what they have by cutting costs further. It simply means business leaders should adapt better and, helpfully, Lotus has shown the way in three simple steps:
1. Work with finely-grained objects - like the Lotus CEO, break things down to the lowest practical level of action. Rather than re-design the whole car he looked to question the right of each component to be there in its current state. However, if you’re in a service organisation DON’T confuse people for car parts (people are more complex than component parts!). Instead the unit of analysis should be narratives (the micro-stories) that spread like wildfire around your organisation, shaping how people act. Become aware of them and adopt pragmatic steps to get more of the ones you want and less of those you don’t want
2. Leverage distributed cognition - Getting everyone involved not only helps create buy in but more importantly taps into one of the most important maxims of the new business paradigm: answers are already known, but just very widely distributed. Your challenge is to bring those knowledge-rich perspectives online - seeing what’s really happening through the eyes of those who know this best: customers, employees, suppliers etc. Again, capturing the narratives people share and exploring them with tools such as SenseMaker® lets you do this quickly in real-time
3. Ensure disintermediation - finally, and most importantly for business leaders, you must get your hands dirty. As Rumelt states in his excellent book ‘Good Strategy/Bad Strategy’ “Leaders who stay ‘above the details’ may do well in stable times, but riding a wave of change requires an intimate feel for its origins and dynamics.” Don’t let middle-men - internal middle-managers or external ‘experts’ - get in the way of seeing things with your own eyes as this is the only way you can effectively match what is possible (to do) with what is (really) needed.
The next stage in the evolution of business is here and it’s frugal. The barriers to entry are no longer capital-based ones but knowledge-based. Are you on board?
#TheNewSimplicity #SmarterOrganisations #SenseMaker
(1) This story was covered in the UK Sunday Times February 2015 http://www.thesundaytimes.co.uk/sto/business/Industry/article1516483.ece though I came across this in the excellent 'Cynefin Mini-Book' p6 http://www.infoq.com/minibooks/cynefin-mini-book
… the simple answer appears to be that too few Russians understand what the word charlatan means.
For example, I received an invitation recently from a respected business association in Russia (one I’ve done work with) to attend a seminar with “one of the world’s currently most famous gurus in developing business.”
Never having heard of this particular guru - whose focus is unsurprisingly on anti-crisis measures - I looked him up on Wikipedia. His page is the picture above and in summary reads: page deleted due to ‘unambiguous advertising or promotion’ and ‘no references to support claims of notability’.
While I have no idea if the above ‘guru’ is a charlatan or not it does shows how easily Russia buys the snake oil salesman’s pitch every time. Simply put, business leaders here (or those that promote or attend such seminars) are particularly susceptible to the ‘myth of the silver bullet’ - the one right answer that will solve all their complex problems in one easy step.
In crisis times ‘silver-bullet seekers’ are particularly vulnerable to smooth, self-promoters. But if businesses in Russia continually have the wool pulled over their eyes by those with style but not enough substance to convince even Wikipedia editors that their notability is genuine, then who does the fault lie with?
So, let’s take a moment to look at some other - non-guru dependent - options for real anti-crisis measures. How about actively engaging the 87% of employees who, according to Gallup, are not currently actively engaged at work at all? Wouldn’t this deliver a massive return on your current monthly payroll investment at negligible extra cost.
This may actually be easier to do than you think. Most (though not all) people who work in your organisation have a deep understanding about what’s really happening on the frontline and why. They are often deeply immersed in what they are doing and have insights into what could be done better. Few, if any, external consultants or ‘gurus’ have this deep appreciation of your local context. So, you’d be better off listening intently to your people that you pay anyway than throwing good money after bad listening to someone else with little or no understanding of your operating context.
In a complex world this is the new simplicity: answers are already known - they are just widely distributed amongst all the people in your network. Your challenge as a leader is to tap into those knowledge flows and discover yourself how to nudge your organisation towards a viable future.
So, instead of paying for the same old snake oil that will have little to no chance of solving your business problems overnight learn to start unlocking the evolutionary potential of your present.
#SmarterOrganisations #SenseMaker #ThinkTankNetworks
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