Navigating strategic complexity Part II

Last month I suggested that organisations should continue to draw on their existing planning, budgeting and strategy processes for insights. This is because these provide an array of data that is both valuable and actionable. For example, organisations with sales and marketing teams collect real time and forecast data from their customers that is helpful in short to medium-term planning – both in guiding decisions and as an adjunct to support change, especially timing implementations.

I also suggested that in times of high volatility, uncertainty, and complexity when coupled with ambiguity of the meaning behind data (VUCA), organisations need to establish, enhance and expand their foresight capability too. This suggestion was made for multiple reasons, namely to:

  1. Help loosen the grip of current ‘comfortable’ patterns of strategic thinking,
  2. Engage a larger population of the organisation in data collection and interpretation, and
  3. Develop useful frameworks to help make sense from VUCA information.

In other words, in order to deal with the world as we find it we need a range of ways of ‘seeing’ that are helpful rather than restrictive.

Roger Martin and Tony Golsby-Smith have a thoughtful article in this month’s HBR 1. Some of you who follow my blog may think that they have plagiarised my ideas (yes, I am being facetious). They ask the question that many have been asking for some time2, what is the best way for management to ‘see’ the world? They propose a simple “can/cannot” test for evaluating the ‘changeability’ (my word) of the phenomena being studied. In applying this test, the authors are essentially asking whether the subject being investigated is governed by rules that make the control of the subject beyond that of any human. If the subject is not governed by immutable ‘natural’ laws it can be changed by human intervention. Martin and Golsby-Smith go on to suggest that “Executives need to deconstruct every decision-making situation into cannot and can parts and then test their logic.” The reason? Well, because much disruption occurs in the “can” space that is most often evaluated as “cannot” space.

In the context of this article, strategizing with the aid of lookback data fits into the empirical world of ‘natural science’. It is quantifiable and retrospectively explains cause and effect. The risk is, as with investing by assuming past performance will predict future performance, that we are basing a strategy on the assumption that the world will behave in a similar way to what it did previously. In other words, our data, and many of the mental models that employ it, are about the past but our decisions relate to the future.

The key point of the two blog articles in this series accords with the views expressed by Martin and Golsby-Smith 1, namely that management needs to engage with paradigms in addition to that of natural science empiricism and include social science and even social justice research and methods. This because the world ‘sees’ diversely and acts in ways that do not always follow generalised expectations. And if strategy is to be effective in dealing with this diverse world then it will need to learn to resonate with it, rather than expect it to yield to the expectations of one group of managers.

If you buy my argument to this point you may be wondering how to go about embedding foresight approaches into your strategy formation activities in a way that sets the organisation up for the best possible outcomes.

My experience suggests that the shift has to be undertaken both with sensitivity to the culture, arrangements and skills of the organisation, and to the nature of the challenge it faces externally. Internally, the job is not just to acquire skills in qualitative research methodologies but in interweaving skill with processes, structure and culture that build capability with an action orientation.

My suggestion is to be patient with this change. The shifts in mental models required to gain value from alternate paradigms is not insignificant. Much of western culture, its education and conceptions of organisation are founded on the scientific paradigm. So, whilst teams might intellectually understand the value in changing, ingrained patterns will prove challenging. The conflict that can arise from discorded perspectives will require considerable attention. Accordingly, set a pace that is a bit of a stretch but not one that will tear at the fabric of current organisational performance.

Externally, a case for change will revolve around urgency and opportunity. For example, in attractive sectors where competitive advantage is maintained due to “can” structures, disruption is going to be more likely. Much can be learned by studying successful disruption and looking at structures, beyond the hype of technology, that have given way to create new competitive fields.

Whether or not you make the decision to include foresight into your strategy formulation capability will be determined by the diagnosis you make of your current situation. Therefore, my final recommendation is to be mindful of the insidious nature of human cognitive biases. It can be easier to justify not changing than to genuinely grapple with the possibility of a need to change. Here I suggest not only considering additional external points of view, but to begin to explore and understand notions that you would normally consider to be irrelevant to your organisation. One way this can be done is by reading much more broadly than you would do normally, and to deeply reflect from both the author’s perspective as well as your own.

This last point about reflection is especially valuable should you find yourself in disagreement with the author. Writing a journal entry on what it is you disagree with, and on what basis, can help open access to assumptions that may have been previously missed. It is these assumptions that are a major contributor to the camouflage of “can” with “cannot”.

  1. Management is much more than science https://hbr.org/2017/09/management-is-much-more-than-a-science
  2. See for example Reframing resistance to organizational change by Robyn Thomas and Cynthia Hardy http://econpapers.repec.org/article/eeescaman/v_3a27_3ay_3a2011_3ai_3a3_3ap_3a322-331.htm and the more radical Against Management: Organization in the age of Managerialism by Martin Parker http://au.wiley.com/WileyCDA/WileyTitle/productCd-0745629253.html

Photo by Joshua K. Jackson on Unsplash

Navigating strategic complexity

I opened a scenario workshop recently by suggesting there were at least two ways to do strategic planning (and, of course, there are more).

One approach extrapolates a line of regression beyond the current time period (this year for example) forward into the future. With this approach a steady trajectory of growth is forecast with risks associated with ‘unknowns’ accounted for by applying a contingency factor – usually a (small) percentage plus or minus of the total projected data (sales, profits, widgets etc. ). I went on to suggest that this method has been popular with organisations and industries that have been operating for some time – like the taxi industry.

The mental models that underpin this approach to planning see the future in pretty much the same ways as it sees the past. It acknowledges that there will be some bumps along the road but these will be overcome as they have always been.

By contrast the mental models of the second approach accept that the future is unknown and that there are forces at work that can, and most likely will, have a profound impact on the organisation’s future. Such forces operate under labels such as technology, competition, political influence, the economy, environment and social system with which we tentatively connect and reconnect.

The world we inhabit today has an increasing probability of surprise. Entrepreneurs have at their disposal tools and information that enable individuals, from countries rich and poor, to compete head-on with not just large organisations but whole industries. Knowledge disseminated through education aimed at mass markets has contributed to the creativity, capability, drive and beliefs of millions that they don’t have to accept the world as they found it – that they have, in fact, the power to reinvent it. And they have increasingly available evidence to back up their beliefs. You don’t need me to list the number, size and scope of disruption today. That news is readily available.

With proof of the disrupting power of technology, social change, and inventiveness, however, the mental models of seeing the future as a continuation of the past are shown to be defunct. Or are they?

My read of the world today is that there is much change. Yet there remains much familiarity. Sure, we might pin a map on our Uber app to get a ride to a party rather than call a taxi, but we still work, tend to our families, exercise and eat. We still like to ‘get away’ on holidays, read books, bank and wear nice clothes. Aspects of life have changed and will continue to change but life, so far at least, goes on. And whilst fiction writers and futurists warn of a coming threat to humanity, the probability of total automation or the annihilation of the human race in the near-term seems preposterous. Of higher probability is that humanity will devise ways of adjusting and fitting with its future.

And this brings us to an important point. While some suggest that the old model of developing strategy based on what we know from the past should be completely replaced, it’s my view that this argument is poorly founded. Instead, I advocate that organisations supplement and strengthen their existing strategic management approach with tools, processes and capabilities attuned to disruptive forces as an adjunct to existing approaches. Put another way, mine is an AND argument that encourages synthesis of both rear and forward-looking information. Organisations need to continue drawing from their past and current pool of experiences and information and maintain intelligence gathering from current sources. That said, organisations cannot rely on this old approach alone.

How might organisations begin to strengthen their strategy management capability to ensure it is more attuned to the dynamics of the current environment? There are a range of foresight tools that are an appropriate addition to the sensing and sense making tools of strategic management. These include Delphi, the Futures Diamond, Theory U, and Integral Futures. These can easily be learned by teams and employed across strategy processes. The challenge with introducing these sorts of tools in organisations that have been doing strategy a particular way for a long period of time is that they are different; perhaps too different for team-members to really buy into a) their use and b) the outputs they produce.

As a result, the introduction of foresight tools should be accompanied by a program of change goaled to enhance thinking and expand old mental models. Such a program needs to target shifts in thinking of individuals, as well as routines and processes, culture and perhaps even identity. It’s also important to be realistic with such initiatives as shifts in mental models, culture and identity happen at a pace completely different to that of introducing tools alone. The risk is, introduce the tools without the changes in thinking and the tools could easily die out before their usefulness is truly felt. Worse, such a failure might end up in the pile of failures labelled “we tried that”, making revisiting such an initiative even more difficult.

Such a program should also include mechanisms that encourage diverse participation and involvement in strategic processes. Here, by diversity I mean diversity of thinking, perspectives and attitudes. Again, the goal is to expand mental models in order to welcome and produce fresh insights. These won’t come by reinforcing the current social systems ‘in group’ participation, sameness of thinking and old biased decision filters. As critical thinking capability expands, an organisation can introduce additional foresight tools such as systems thinking and scenarios to those I’ve mentioned above.

Communication systems too must be enhanced to ensure well-formed ideas surface, are heard and are acted on. In enabling teams up, down and across the organisation to participate in the development of foresight capability, organisations are tapping into the enormous tacit potential of their workforce, helping to build strategies that navigate organisations towards achieving their goals, and investing in the sustainability of the organisation’s future.

Mental Models – What are they and why are they important?

Anybody who has stopped to think about how they drive a car today will recognise that it’s a lot easier than it was when they first started out. In those early days, we really had to think about every little thing. About checking the mirror, using turning indicators, monitoring our speed relative to speed limits. About oncoming traffic, passing traffic, turning traffic and pedestrians. And we wondered how others saw us, whether we looked like we were in control or not.

Once we passed our driving test and had been driving for a while we settled into a routine. The things we were initially taught slipped into our subconscious and we started to unconsciously developed awareness and skill in navigating familiar terrain. We had, without realising it, developed mental models about driving in the conditions we encountered and used these to almost automatically drive our regular route. Sceptical?

Think for a moment about your usual driving situation. Perhaps it’s in a city and your usual route is from home to work and back again. Pretty easy, right? Now, imagine you’re on holidays in the Swiss Alps. You’re driving a rental car, it’s night, the weather is ghastly with snow and rain pouring down making the road surface very slippery. And to make things worse, you missed a turn and are now on a back road that is more like a goat track than a highway. As you wind your way down the mountain you notice a few rocks dislodge not too far in front of you and tumble down the cliff onto your goat track. How are you feeling right now? Focused? Alert?

Because we consume so much energy in dealing with the unfamiliar and difficult, the brain has to find ways to help us survive over the long-term. It does this by simplifying many situations. In the first example – city driving – the brain has built representations of the environment so that we don’t have to constantly think about its complexity. These representations are often called mental models. In the second example – goat track driving – the lack of familiarity means that the representations are not appropriate and can’t be used. As a result, the brain has to work, and work hard. Think about how tired you are when you arrive at work (first example) relative to you getting down the mountain (second).

Mental models are snippets that are generally incomplete. Yet we rely on them without consciously challenging their completeness or, indeed, their accuracy. Their unconscious use relives us from the cognitive load of complexity by fooling our thinking. This, in spite of what Alfred Korzybski noted, that “the map is not the territory”1.

Mental Models in Use

The great problem with mental models is the lack of consciousness with both their use and accuracy. In situations of complexity, such as making sense of, and decisions with, lots of information from the external environment, strategists unwittingly rely on mental models. I say unwittingly because mental models affect not just how we process information but also what information we deal with. Yes, mental models act as filters in order to help the brain and body cope with complexity. And they also simplify how we process and make sense of complex information. This helps explain why two people, processing exactly the same data, can come to wildly different conclusions about it. Their conclusions are perspectives.

A very interesting study was conducted in the 90’s on the makeup of competitive industries 2. It concluded that the boundary and specific competitive participants were a result, not of economic data, but of perceptions. And further, that these perceptions established self-reinforcing mental models about the nature and attributes of competitors and competitive behaviour – the way competitive behaviour was analysed and corresponding competitive decisions and actions followed.

The Importance of Mental Models

You are, no doubt, coming to appreciate that teams of people with diverse education, experience and social networks are likely to have equally diverse mental models on some topics. Likewise, people from more homogeneous backgrounds; same city, country, education system and with similar social structure will see situations more similarly.

The implications are profound:

The effects mental models have on information processing go largely unnoticed

Homogeneity can lead to patterns of sameness

In a world constantly changing, sameness of thinking can be strategically self-defeating

Ask yourself:

How is your organisation facilitating an appropriate level of ‘strategic thinking’ diversity?

What processes does your organisation use to guard against the risks of sameness?

Can you identify dominant mental models in use in your organisation?

Want to know more about how mental models work, and how they contribute specifically to your organisation’s performance? Make an appointment to chat to one of the Org Change consultants in your area. This link will take you to our Contact page.

References
  1. See https://en.wikipedia.org/wiki/Alfred_Korzybski and https://en.wikipedia.org/wiki/Map%E2%80%93territory_relation for a bit more detail
  2. A study in the Scottish Knitwear industry titled COMPETITIVE GROUPS AS COGNITIVE COMMUNITIES: THE CASE OF SCOTTISH KNITWEAR MANUFACTURERS. Further reading can be found here.

Organisational alignment for enjoyment and performance

Imagine an organisation in which everyone works together, collaboratively and enthusiastically, to achieve a common and worthwhile goal.  Ultimately that’s one key purpose, perhaps the key purpose, of organisations — to coordinate effort and expertise to achieve a common purpose.  Imagine an organisation where the efforts of every person contribute to the same (or compatible) worthwhile outcomes.  Imagine an organisation in which all of the practices and procedures, formal and informal, have the same effect.

How many organisations do you know that fit that description?  And how might an organisation become like that?  I’m hoping that this document might be the start of a conversation about that.

 

A few years ago I had the pleasure of working in a high-performing organisation of several hundred people.  Its purpose was to support people with a particular serious and common illness.  It also raised funds for other initiatives concerned with the same illness.

I enjoyed working with them, especially because of the enthusiasm of their people.  Over the course of several years I worked with a variety of them.  They came from all levels of the organisation, from workface to CEO.  They were from many different functions.

Almost without exception, every one of them that I worked with liked and valued their work.  Part of the reason, I decided, was that they understood and believed in the organisation and its purpose.  In the long term, it was to eradicate the illness that was the focus of the organisation’s efforts.  In the short term, it was to make life as pleasant as possible for people with the illness.

Almost without exception the people I encountered in the organisation cherished that vision.  Not only that, almost all of them understood how their own work contributed to it.  They knew that their efforts helped to make the world a better place.  They were pleased that it did so.  For them the organisation’s vision was more than some words on a piece of paper.

That’s one form of what I call alignment.  The people in that organisation, at all levels, maintained a clear line of sight from their own work to a vision of a better and worthwhile world.  They knew how their actions aligned with and contributed to the goals of their team, their department, their organisation, and beyond.  That sense of alignment guided their choices and actions.  They knew that their actions made a difference.

I suspect that it helped that the organisation began small and grew from there.  As the organisation slowly grew, newcomers learned the culture and the purpose from those already there.  The CEO also played an important role.  He met each person joining the organisation.  He talked to each of them about his aspirations for them and for the organisation.  He put effort into maintaining his relationship with them.

He talked to people as often as he could.  He encouraged others to do the same.  Success allowed the organisation to grow.  As it did so, he no longer had the time to meet with everyone as often as previously.  Instead he depended more and more on team leaders to convey the message about the organisation and its dreams.

In still larger organisations it becomes more difficult for all effort and expertise to be coordinated.  The role of team leaders then becomes even more important.  For many staff in large organisations, their own team leader is their main link to the organisation as a whole.  The team leader is the person to help them maintain the line of sight from their immediate work to the organisation’s ultimate purpose.

 

As you can see, I’m thinking of alignment as something that is achieved when everything points in the same direction.  There are many forms of it.  A second form occurs when everything about an organisation conveys the same message, to all organisational members, about purpose.  It contributes to a coherent and high-performing culture.

There are a few published examples of such organisations.  I wish I had good examples I have actually encountered.  In my experience it is much rarer.  Many of the instances I can recall from my own experience are negative, from a range of organisations.

As I said, CEOs and team leaders have an important duty to inform their people about the organisation and its reason for being.  So too do the human resources functions within the organisation.  These are the point of contact for people during important transitions in their organisational experience: recruitment, selection, induction, development, promotion and so on.

Each contact between human resources people and staff is one more opportunity to convey the key messages to the staff.  The staff can learn what most matters to the organisation, and how they fit in.  At important transitions in work life, staff will seek meaning in what the human resource people say.  And even more, they will find meaning in how the human resource people act towards them.

The question then becomes, how well aligned are the different human resource functions?  How much agreement is there in what they communicate by word and especially by deed?  Are the different functions aligned?  Do all of them convey the same message?  Does that message also agree with what team leaders communicate?  And is that consistent with the organisational purpose?  In my direct experience, this occurs not very often and not very well.  I would be very interested to hear of organisations that do achieve good alignment between the different aspects of their human resource functions.

I may have very few examples from direct experience.  I can envisage, easily, how it might be better.  Of the many possible instances, here are a few …

  • recruitment advertisements that communicate that the organisation values its purpose, the contribution of each role to that purpose, and the person who will serve in that role
  • selection processes, including selection for promotion, that demonstrate by word and deed the qualities that the organisation values, and why
  • an induction (“onboarding”) process that relates each aspect of the person’s work to the line of sight from the person to the organisation’s vision, short term and long term
  • learning and development activities that help the person to better align their role to the team and organisational purpose — and to make the most of their strengths as they do so.

Each of these, and those I haven’t mentioned, is another opportunity to contribute towards high performance — towards an organisation in which all effort and expertise is aligned and coordinated.

Yet you may have noticed that I haven’t yet mentioned performance management.  That’s not because I think it is unimportant.  On the contrary, I think it is too important for it to be merely a formal annual chore.  In my experience, in most organisations neither appraisers nor appraisees enjoy their annual or six-monthly appraisal.

At each contact with an organisational member the human resources function could — but seldom does — convey the way forward to better alignment, for better achievement of the organisation’s purpose.  Even more importantly, it is the team leader who can interact daily and more often with team members.  I visualise performance conversations taking place moment by moment, many of them informal.  Formal performance management is mostly replaced by continuous performance improvement.  Weekly or fortnightly semi-formal meetings can then supplement and support the crucial informal components.

In high-performing teams I think of performance improvement as an embedded and natural part of everyday team functioning.  Over time I envisage the team working toward becoming forward looking, optimistically honest and supportive.  Bit by bit the team can improve the fit between person and person, person and team, team and team, team and organisation, and team and external stakeholders.  I’ve worked in just a few teams like that, and in a very few small organisations.  They were exciting places to be.

How many teams like that do you know?  In the teams you have worked in or encountered, how much of that has that been achieved, and how often?

When it is achieved, human resources people then can adopt an important support role.  They can equip team leaders and team members with the skills to make performance conversations frequent, enjoyable and valuable.

 

In summary, alignment in both the forms discussed above can have an important signalling function — to everyone.  The goal is for every member and team within an organisation to develop and maintain a clear line of sight from their present efforts to the better world they pursue.

Regular communication between team members and team leaders, supported by human resources, is an achievable and important course of action for achieving this.  I welcome any examples, positive or negative, that you can contribute from your experience.

CHANGE – What do we mean by success? Pt. II

In part one I asked the difficult question, ‘How do we determine success when investing in organisational change?’ I ask because this question does not seem to be at the fore of decisions about which change approach to take. Perhaps it should be.

In this, the second in the series, I frame success by asking two questions. The first ‘Who should benefit from investments in change?’ is strategic in nature. The second ‘What time periods should be considered when monitoring change outcomes relative to success criteria?’ relates more to the organisation’s dynamics. I also introduce the idea that some outcomes of change are intended, while others are unintended.

When thinking about the strategy, and the organisational change it urges, there are a multitude of potential starting places. Many focus on industry dynamics; identifying a niche where capability and execution can create a (reasonably) sustainable edge. Others start with a sense of purpose; a long term vision of what an organisation could achieve and the benefits that can flow. Another starting point is with stakeholders; making clear who the organisation is intended to benefit.

This stakeholder perspective is an important as it calls out those whose voice needs to be represented when defining the strategy and ensuing change. And it sets the stage for these voices to be part of the process for determining change success. Let me call out, in no particular order, those stakeholder groups I think need be considered.

Staff are often identified in an organisation’s Vision, Mission and Values statements. Most organisations would like their staff to be motivated, smart, hardworking, innovative, agile, capable and focused, so strategy often aims for these outcomes. The reality of the make-up of organisations is that staff and shareholders have many and divergent interests which can play out in organisational politics in turn driving investment in change.

Obviously shareholders should benefit from the success of an organisation and the investments it makes. After all, it is through the risks shareholders take that the organisation has the backing required to function. In a for profit organisation shareholders are the direct owners of shares (as distinct from some institutions such as investment funds or insurance companies who own shares on behalf of the real backers). What about in government organisations? Who are its shareholders? Philosophically, at least, I am sure most would agree that tax payers could be considered in an equivalent light to shareholders. In a not for profit organisation the equivalent is a much broader group of stakeholders which includes the general public, donors, and those named through the purpose of the organisation.

‘Customers’ are the stakeholders who are the recipients of products or services the organisation delivers. Often strategies are specifically aimed at improving the organisations position relative to their customer: higher market share, more transaction volume, greater loyalty and deeper relationships might be some desired outcomes. There can be confusion when discussing ‘customer’ so let me be clear what I mean. Here I am talking about the ultimate beneficiary. In a for-profit model, the customer is the one at the end of the value chain who pays the final price. Similarly in a government and NFP setting, the customer is the consumer of the service.

Most often the confusion arising from the term ‘customer’ is when people consider the world from the point of view of the work they do. A logistics business, for example, might consider a food manufacturer, or a supermarket chain to be their customer. While these stakeholders might pay the bills, they are intermediaries in a value chain, and in strategy sense, need to be thought of as such. Better still, as with suppliers below, they can be viewed as partners.

Suppliers are often critical to the success of a strategy. At times their capacity constrains volumes; a fact that can also drive competitor behaviour. Likewise, organisational success is impacted by other supplier  attributes such as quality and timeliness, cost and technology.

At times strategy is driven by regulation and government policy. Here though, I’d argue the stakeholder is the community within which the organisation operates, and from whom it draws staff, investors, partners and customers. Regulation and policy are expressions of explicit community standards and expectations. I believe it valuable to also consider community’s tacit expectations as these influence government regulation and policy as well as organisational culture.

There is also a need to consider the natural environment, not only because it is a driver of community and government intervention, but also because it impacts the long-term sustainability of the organisation and the world in which we, and our children live.

This is a nice segue into the second question I posed regarding time. In part one of this blog I distinguished between installation and strategic organisation change outcomes. When a system is installed and ‘goes live’ there is a sense of success. If we consider the change from a broader perspective, installation can be seen as just one milestone on the journey to strategic success. The time horizon, therefore, becomes an important tool in developing clear success criteria.

How long does it take for the effects of an investment in change to flow through? Whilst the answer is context specific, the thinking and response will influence how long benefit monitoring should be in place for, and what approach might be taken to organisational change. More on the latter in a moment.

In taking a longer view of the outcomes of a change initiative it is possible (and a good idea) to examine the effects the change is having on the culture of an organisation and its partner network, as these effects typically take longer to show up. It also helps think about how change outcomes can be incentivised and thereby increase the accountability of those steering the change to focus on more than short term installation. Allied, with this it also helps shape focus on outcomes that might not have been anticipated or intended, but which leave a legacy, positive or negative, for the organisation and future change initiatives.

If we are to improve the return on change investment, then we need to improve both the way we think about success, and the way we learn from approaches taken to organisational change. The selection of one approach verses another must be made more explicitly, be whole system oriented and contextualised within the organisation’s strategy. And the approach should be selected because it better fits with the stated intent of the initiative, and not be based on what is popular, easy, understood, better for one (group of) stakeholder(s), or lower in direct cost. The selection of an approach, and the assumptions that underpin it, should form part of overall success monitoring and organisational learning. In the absence of a more rigorous methodology we not only risk waste, we set a trajectory for repeating the mistakes of the past.

CHANGE – What do we mean by success? Part I

A few years ago, I facilitated a conversation on the differences between Organisational Development and Change Management, two of the more prominent approaches to organisational change. The conversation took place in a LinkedIn group with almost 60,000 professionals registered.

The point of the conversation was to understand if professionals involved in change were aware of the differences between these two perspectives, how they thought of each, and how their thinking influenced their work. Responses were varied; some identified philosophical differences, some differences in beliefs about which they thought was better – and sometimes why, while still others saw the two as alternative approaches to be applied depending on the circumstances – which mostly was expressed as fitting with the preferences of the customer. My read of the responses was that the majority reflected the participant’s own familiarity of what was on offer.  In other words, participants advocated for what they knew and had a vested interest in.

Since that conversation, I have given much thought to how people think about organisational change, and how their conceptualisation influences the approach taken. And, while my research at this stage is anecdotal, I suspect that the differences in conceptualisation, and the decisions these conceptualisations underpin, impacts on the success of change initiatives. . The focus of this blog then is to open up one of the most ambiguous aspects of organisational change: what constitutes success?

If you’re reading this blog chances are you have an interest or perhaps have been involved in, organisational change. For those of you who have undertaken change projects, can you recall which of these had the success of the change initiative clearly defined and with explicit criteria against which success could be assessed? And of those projects, which had mechanisms in place to monitor success against these criteria? And of those, which maintained those monitoring mechanisms for more than 3 years? I have one more question; of the projects that had clear criteria for success, which criteria were related to successful installation (of an IT system, a change in structure, or a new manufacturing or service process for example), and which criteria related to strategic success?

I’ve been doing work in organisational change for quite some time and in my experience much of the investment at the micro level isn’t monitored against strategic objectives. Further, lessons relating to the effectiveness of a particular approach to change are not captured and embedded back into the organisation. I am curious to know of your experiences, so please, join the conversation via the comments form below.

Anecdotally then, the choices made relating to approaches to change seem to fall back, not on what is the most effective approach for the organisation strategically, but more on what fits with the experiences and beliefs of managers who are given the task of getting the job done. And these choices seem to be significantly influenced by the priorities assigned to the job; most often speed and cost. The story doesn’t stop there, for these same priorities seem to be driving the development of approaches to change, with modern Change Management evolving into a tool for rapid project adoption. This is a notable contrast to its earlier roots, not to mention the expectations of organisational stakeholders. More on the latter in future blogs.

Historically, Change Management appears to have risen from the work of Julien Phillips of McKinsey. Some may remember Phillips as co-author, along with Peters and Waterman, of the seminal work ‘Structure is not Organization’ which introduced the world to the 7S framework. Phillip’s work on Change Management was published in Human Resource Management in 1983 under the title “Enhancing the Effectiveness of Organizational Change Management”. In that article Phillips presents a high-level model that reflects some of the systemic aspects of the 7S. As represented in the diagram below, Phillips model takes a multiyear time horizon, includes strategic drivers from the external environment, speaks to the multitude of divergent interests that is the making of organisational politics and touches on the need to align organisational culture with the intent of the change. Importantly, the model is focused on the management team of an organisation, helping them to think about how they might succeed with making the change they are accountable for.

 

Fast forward to today and the most popular approaches to Change Management involve much shorter timeframes, are more oriented to minor customisations of predetermined solutions, and are overwhelmingly monitored for delivery of project reports and far less for medium-term business benefits. Importantly, accountability seems to have shifted away from general management to temporary project teams with Change Management now focused on selling the change, nullifying resistance, and establishing the initial skills required of the newly established system. Modern Change Management seems to be much more oriented to installation than the early Change Management approaches, which were considerably more strategically focused.

The big question is, is this really the intent? Who is this approach to change serving and who should it be serving? These important questions will be explored in part two of this blog.

DIAGNOSIS – From 30,000 ft

Harvard Professor Clayton Christensen wrote a worthwhile and readable article on the topic of management theory for the September 2003 Harvard Business Review. In it he offers a metaphor which is very relevant to the topic of diagnosis. The story goes like this.

A patient walks into a doctor’s surgery with alarming symptoms. When she is ushered into the doctor’s rooms she begins telling the doctor of the symptoms. Before she can finish, the doctor hands the patient a prescription and says “here, take these, they worked for the last patient.”

The situation Christensen wrote about in this anecdote is clearly unacceptable when it comes to our health. The question posed by Christensen and in this blog is, is this same situation acceptable when it comes to our organisations?

When it comes time to make changes to how the organisation works there is no shortage of recommendations on how to go about it. These recommendations are usually based on how one solution is purported to have worked for another organisation. We see this general advice offered through a plethora of books and courses on topics like leadership development, innovation, change management and strategy. Some consulting services follow a similar, broadly applicable approach too. And while general advice may offer some help, the notion that it right for a large proportion of organisations, in a large variety of situations, is not convincing.

If we were to translate this broad approach using a health metaphor, it would be akin to recommending paracetamol or aspirin as an intervention. And that’s ok for a mild condition where the intervention is well understood as symptomatic relief, but unsatisfactory for anything more. To put this another way, the assumption built into the logic of this general approach is the same as in Christensen’s doctor-patient anecdote; that one organisation and its situation is the same as any other.

We are not advocates of a general approach as we are of the view that each organisation, and its current context, are different. Therefore, we advocate that each change effort is undertaken through a process of diagnosis. Further, our nuanced view of diagnosis is a little different from the commonly held view which positions diagnosis as an early phase of a linear program of change. Instead, our view is of diagnosis running the entire course of a change program, altering its focus as the change progresses. Let me explain.

In the early stage, diagnosis points teams towards opportunities for improvement and transformation and in doing so helps build support for embarking on a change strategy. Because the focus is both towards the external environment as well as internal, initial diagnostic data helps the organisation understand the full implications of the environmental context as well as helping to establish expectations about the prospects of change and the effort required to achieve outcomes.  The diagnosis process surfaces data that guides decisions on where to start a change process, as well as guiding the design of interventions. This is the common use of diagnosis.

We think of diagnosis extending through the change process and beyond so as to monitor the effects of interventions and to derive data relative to the desired, expected and actual outcomes. We do this because organisations are human systems which, obviously, don’t comply to designs in the same way as mechanical systems do. We fully expect to be surprised, in some way or other, by how the human system responds to changes in management systems, structures, polices, processes, technology, new capabilities or any other form of intervention undertaken. We also expect stakeholders in the external environment to respond as the organisational systems change, and as the organisation in turn responds to the marketplace. This idea is represented by the squiggly line in the adjacent diagram. The best metaphor I have is that of an aircraft which spends most of its time working out where it is relative to an ideal course, and making adjustments accordingly. You might label our view of diagnosis ’emergent’; representing the organisation relative to its journey towards its strategic purpose.

For diagnosis to be useful it has to draw data from multiple perspectives so as to more accurately reflect the whole system. For example, it would be valuable to assess the content and design aspects of the strategy, various systems and processes including scorecards, the structure, leadership and management capability and to understand the effects these produce. Effects play out in performance, climate and culture with insights accessible through the views of stakeholders the organisation serves. As previously noted, diagnosis also needs to incorporate change; forces for change or status quo, effectiveness of interventions, intended and unintended outcomes relative to the goal. The actual list and detail is of course more comprehensive, but better served by future blog posts.

Collecting data for diagnostic purposes is part art and part science. Some data is quantitative and sourced from data stores such as financial, inventory, and manufacturing systems. Some is qualitative and comes via interviews, conversations, and feedback systems. All of these are pieces of the whole system, none complete. As a consequence, sense has to be made of that data, and remade as new information comes to light.  Sense making can be even more artful as the process often benefits from diverse interpretations of what may appear to be ‘obvious’ data and trends. Our inclination, then, is to encourage broad and integrated conversations around both the raw data and interpreted diagnosis. It’s our view that functional interpretations are less helpful and often miss time-sensitive strategic opportunities.

If we are to accept the notion that organisations and their context are unique, and that decisions relating to why, when and how to change are critical to ongoing success, then the case for a robust approach to diagnosis is clear. Does your organisation have a suitable cross-functional diagnostic process built into its design?

SYSTEMS – More than we think?

Systems is an unfortunately ambiguous word that can mean many things. It can mean, for example, a software system such as excel, Oracle, SAP, or salesforce.com. It can also mean a group of interrelated processes such as in sales; lead generation, prospecting, opportunity and lead management, contracting and closing, as well as incentivisation. Of course, systems can be groups of systems such as the sales processes just mentioned being managed via salesforce.com. Together, they may form one organisation’s sales system. And of course, there are HR systems, production systems, logistics systems and many others.

While these are very important in an organisational change context, they are not the subject of this blog. Instead, let me ask, would you consider a belief a system? It doesn’t matter what the belief, it could be a belief about anything. Perhaps a belief about the best school, about how to cook scrambled eggs, or the best time or place to go on a holiday. It will be helpful though, before you read on, to choose a belief. So, here’s a deliberate pause while you do so.

Having selected your belief the remainder of this article will explore its nature. Don’t worry, your belief is safe. It won’t be challenged as right or wrong, but we will be exploring its makings in more detail.

Can you recall how you arrived at your belief? Was it via your own experiences? Or did you read or hear something someone else said? Most people form beliefs by taking in some information from outside ourselves, through one or more of our senses. We then process that information and make sense of it. From that tenuous first snippet of information, a belief is formed through use, refinement, validation and reinforcement over time. In this way, a belief can be considered as something we hold to be true. The language is important here; we hold a belief to be true. What you hold to be true about the best spot for a holiday, best way to cook eggs, is your belief.

Beliefs could be considered ‘alive’ as they are subject to the external environment. If someone has a counter view we may refine, replace or reject the counter. For example, sometimes, we argue, ignorance is the culprit; ‘they haven’t been to this spot’ or ‘they haven’t tried my eggs’ or ‘their evaluation process is muddle headed’. Sometimes there is a refinement of our belief ‘Their holiday spot may be ok in winter but mine …’. And sometimes a replacement; ‘Actually, they are very good eggs. I wonder if I can learn that technique too’. In all these examples a decision is being made, sometimes tacitly, sometimes explicitly, about how right or correct our belief is. And often, what we have invested in a particular belief, amplifies how tightly we hold that belief as true. Think of some of the most protracted world problems and follow the belief trails of the parties involved to get a sense of what I mean here.

As may be obvious at this point, there is some similarity between the sales process and belief process. Both have a sequence of steps, with inputs and outputs, and feedback loops guiding the process along the way. But does the process nature of belief formation make it a system? Surely some beliefs are factual, aren’t they? I mean, doesn’t one plus one equal two? Isn’t a triangle a triangle in fact? Well…

Do you see the white triangle in this picture? Well, it’s not really there. The diagram is called the Kanzsia triangle and it’s a bit of a trick. The more objective objects – three circles with an eighth of the circle removed, and the gaps in the lines of the blue triangle – suggest just enough information to the brain for it to “fill in the gaps” and create the fact of a white triangle, even though one does not really exist.

Yet, it would not be hard to imagine a conversation between a few people ardently supporting each side of the argument that a triangle was, indeed, there. We often confuse objective and subjective data as we rush to form a conclusion – a belief – and move onto the next topic or focus of our busy day.

I argue that our concept of objective reality is just that, a concept. Some have used a map as a metaphor for our concept of reality. That’s the origin of the expression “the map is not the territory”. No matter how we think of reality, our concept of it is created by our thinking systems interpreting, storing, retrieving, reinterpreting and making use of information. Each belief we hold is formed and refined in this way. Often, one belief relates to another. Challenge a belief and you may very well be challenging a number of them. Make use of a belief and you will likely be making use of a number, often unconsciously.

As Marcus Aurelius suggested, “The universe is change; our life is what our thoughts make it.”

Making decisions makes use of beliefs. Should I jump in and buy a residential property now? That depends on your beliefs. One real estate agent I spoke with recently very strongly suggested his vendor’s property was worth $x because the market had risen significantly over the last two years. On the other side of that same coin, ASIC is keen to ensure investors are aware that past performance is not an indication of future performance. Both stakeholders are invested in their beliefs. And while the contrast in this example may be obvious, the actual beliefs underpinning each stakeholder’s behaviour is not.

It’s the same in organisations. A multitude of beliefs underpin critical decisions. Often, the course of action that worked in the past is chosen over an ‘untested’ one. While many see this as a problem, I see this as a point of leverage. If underlying beliefs can be accessed, then there is great opportunity for change. And while many of the systems in use within organisations are others’ systems, changing them will most often succeed only as a result of me changing my beliefs. Approach the new change as I did the last one and I am far less likely to be successful.

Fortunately, the beliefs most accessible to me are my beliefs. The more I gain access to my beliefs about how change works, the more lightly I hold on to them, the greater my ability to use change as a lever. This is especially true as I dip into the system with interventions designed to get a particular outcome. By holding my beliefs about those outcomes lightly, and by being less invested in designing changes that are ‘right’, the more effectively I can respond to the data the system produces as an output. This is the power of ‘self’ as an instrument of change.

Of course, gaining access to other’s beliefs also helps, but that’s a topic for another blog.