Science teaches us over-constrained systems blow up. Formally structured systems require its moving parts to follow “the exact planned course, with as little deviation as possible - for deviations are more harmful than helpful. This …” continues Nassim Taleb “…is why the fragile needs to be very predictive in its approach.” But in a complex world - with inevitable unpredictability - it becomes a question of when, not if, highly formal structures fail.
The human desire to repeat or prolong success - engineering repeatability - is the driving force of formality. Yet, research by the economic historian Leslie Hannah demonstrates that dictating the future is beyond the capabilities and means of even the largest and best organisations. Taking the world’s top 10 companies in 1912 as her starting point she found only three of them there by the end of the century (Exxon/Jersey Standard, Shell and General Electric). Perhaps not so surprising? But of the others none were in the top 100, while the biggest company, US Steel, wasn't even in the top 500. Ten of the leading hundred companies in 1912 would vanish completely within a decade, while over half had completely disappeared by 1995.
Success in one paradigm increases the likelihood of failure. We fall victim to fundamental attribution errors - believing our own hype, thinking success is down to us and we are masters of our environment. We start to stand aloof from the rapidly changing world around us, blinkered to the need to adapt to external change. Success becomes an entrained thinking pattern ill-suited to recognising shifts in context and ‘breeds the inevitability of future failure.’ It’s most dramatically expressed in the construction of bright, shiny new HQs - such as the Royal Bank of Scotland’s in Gogarburn at the height of its hubris before shortly being re-nationalised - or other architectural wonders on the crest of a dramatic crash - such as the Empire State Building, which was started at the outset of the Great Depression, or more recently the Burj Khalifa in Dubai that presciently announced the Great Recession.
Certainty in strategy is the mechanism by which we sleep-walk into chaos. While good strategies, taken with a pinch of salt, can help organisations operate more effectively they must, if they wish to be of real value, refrain from claiming certainty about an uncertain future and allow for contingencies that can’t be predicted. For “it is when a dominant narrative emerges within an organisation, when dissent is not tolerated, that the chances of making bad decisions rise sharply”. This is why, strategists should not take their activities too seriously - and neither should we.
Shape the Future
Don't just adapt to it