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.
The war for talent used to be a hot topic - until the financial crisis made the war for liquidity hotter. We may be on the edge of another crisis now, but we’re also at the start of a new cycle of talent wars. So how can you win this time?*
Carol Dweck’s work may offer the revolutionary breakthrough to winning the talent war. For talent itself is not about how intelligent or capable a person appears to be, but how fixed they think their abilities are.
The fixed mindset
A great education, rapid career progression and impressive bearing in interviews are clear signals of real talent. A great business school convinces organisations to pay over the odds ‘because that kind of education doesn’t come cheaply’. Premiums are paid for great work, even if another company has already reaped the benefits of that. And as to whether this person fits our organisation - well, talent trumps culture! Doesn’t it?
Many talented people on paper will have a deeply debilitating affliction though: they believe they were born with a fixed amount of intelligence and capability and while the quality of the latter can be maximised, it’s limited by the quantity of the former. They have ‘fixed mindsets.’
The problem with ‘fixies’ is that they spend their lives driven by the need to prove their innate stock of talent is exceptional. They obsessively seek explicit recognition of this and avoid anything that might risk exposing its limits (and challenging their identities).
Winners on paper therefore are often not those who always find a way through, but those who avoid getting into risky environments in the first place. If it looks like it could go wrong they’ll pass the risk onto another group. Fortunately, that group embraces such challenges.
The growth mindset
The ‘other’ group are those with a ‘growth mindset’ who see their abilities as open to cultivation, unlimited by birth constraints. Even their level of intelligence can be increased.
At first glance this may appear to go against much of what we know - fortunately, much of what we know is wrong. People often point to IQ tests as ‘proof’ that intelligence is fixed, without being aware that IQ tests were invented to measure how well schools were growing the intelligence of French schoolchildren. IQ tests were a measure of growth - checking how well schools were performing - not one-off indicators of a child’s capabilities.
‘Growthers’ don’t cheery pick what they’ll do to protect a fragile self-image. They take on challenges that force them to become better, learn from failure, become resilient. They often do this because they were not born in the ‘right’ place as the ‘right’ kind pf person, so didn’t have the options others - the talented ones - had. But over time their mindsets are making such niceties redundant.
For ‘growthers’ do more in their next role than they did in the last, because they’re still learning. If talent management focuses on this future potential, rather than paying for past performance, not only will costs decrease but the talent pool widens exponentially. You’re searching in places your rivals aren’t, and your demand will not outstrip supply.
In the war for talent seek out and pay for those whose best work is ahead of them, not behind.
*Advice on winning in times of crises doesn’t come free!
The biggest short-cut in the business world - part of MBA/consultancy dogma - is the myth of best practice. But while we sometimes accept we can’t always have the best do we understand that we should often reject it even if we can?
It’s logical for leaders to want the best in everything because that’s how you get ahead. Florentino Pérez certainly thought so when he became the new President of Real Madrid - the home of the reigning European football champions - in 2000. The modern era of the Galácticos had begun. Real Madrid would sign the the very best footballers, with the very best global profiles, for the very best money. What could possibly go wrong?
Despite initial success, the Galácticos best practice policy started to unwind. Complacency started to creep in: why do we need defenders when we have the best attackers in the world? why is a manager so important when we’ve got the Galácticos? Pérez eventually resigned in 2006 after the ‘best players in the world’ failed to win anything in consecutive years.
Many organisations repeat the ‘Pérez-fallacy’ on a regular basis today. Not only do they seek the top talent (the subject of tomorrow’s blog) but are seduced by the belief that following the best practice recipe means they can all go home early, confident that bonuses will be earned this year. It’s a seductive, but deeply-flawed plan.
Best practice - the myth of the one right answer - has all sorts of pitfalls:
Most destructive of all though is best practice can blind leaders to the good practice deeply embedded in the organisation today, which it’s probably depending on more than it knows. Given the same resources and support it too could become a new gold standard - but your own, specific to your context, now and ahead of the curve.
Real Madrid needed to make room for all the ‘best’ players they were buying. Soon there was no room for others so they were let go. One of those was a lightly-regarded player (by some) called Claude Makélélé. Pérez announced on his departure ”we will not miss Makélélé. His technique is average, he lacks the speed and skill to take the ball past opponents, and 90% of his distribution either goes backwards or sideways.” Claude wan’t a Galáctico.
Pérez’s Real Madrid didn’t win anything after Makélélé left. Correlation is not causation, but Makélélé’s importance was not lost on everyone at the time, “why put another layer of gold paint on the Bentley when you are losing the entire engine?” remarked one of the Galácticos. It was the beginning of the end for Los Galácticos’ but became the start of a new dawn for Chelsea, the English Premier league that signed him. His importance to one of the most successful sides of the era was not overlooked again. To this day, the position is still known in English football as ‘the Makélélé role.’ Claude had become the gold standard.
Good practice becomes contextually, temporally, relevant best practice if allowed to flourish. The imposition of external (often illegitimate) best practice can limit it. We may already know that we can’t always have the best, but can we learn to not even seek it out?
Just 19% of employees in Russian organisations are engaged. The opportunity cost is staggering: $50 billion invested annually in people not motivated to achieve organisational goals. Is there any other investment area leaders would accept such returns without acting?
In a country that prior to the 2008 crisis had arguably the best human resources anywhere in the world (Economist Intelligence Unit 2007) this represents the biggest missed opportunity for organisations in Russia today. But can anything be done about it?
The management thinker Gary Hamel once famously declared that “human beings are limited not by our resources but by our aspirations”. Nowhere is this more true than in Russia. Organisations overall are unhealthy, for they are not “adaptable … innovative at their core” or “engaging, exciting places to work.”
It’s perhaps unsurprising. Private enterprise was only legalised a little over a quarter of a century ago, giving the modern Russian organisation little time to develop a healthy corporate culture. The road has also been bumpy - from the gangster capitalism of the early 90’s to crashes of ’98, ’01 and ’08. While imported expat talent - meant to accelerate commercial development - was often not of the first variety.
When the going was good though, it was very good. But then again, even a turkey flies in a tornado. But what do you do when the trade winds have died down and you must make your way forward under your own steam?McKinsey have shown the path. Over a decade of research across multiple industries they have uncovered what they call the ‘great paradox of management’ - that “when it comes to achieving and sustaining excellence in [organisational] performance, what separates winners from losers is, paradoxically, the very focus on performance itself.” In other words, if you want to be a great organisation, stop focusing on performance (your measurable operational and financial activities) alone.
What McKinsey discovered was that those who focus on both organisational health and performance simultaneously are “nearly three times as successful as those that focus on performance alone”.
The answer seems obvious - if you want to get more out of your people investment then create an environment that provides what talented employees everywhere want - a dynamic workplace where they feel empowered to make meaningful change happen.
The question is, how do you do that with depleted resources and an environment where tomorrow might be too late …. ?
… 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.
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