In my last post I talked about the lack of innovation within most organisations and how a combination of our education system and organisational culture have created this ‘Kill the Chicken’ environment.
Comfort is the enemy of innovation. Whatever other elements might come into play, why would you move from a status quo of low-risk typified by abundance and plenty? Necessity is the mother of invention; an old chestnut I know but still true. That said neither scarcity nor repetitive failure is necessarily sufficient to drive innovation. Thomas Kuhn suggests in his great book: ‘The Structure of Scientific Revolutions’, 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 model on which they operate. In traditionally structured organisations, even in the face of those consistent, repetitive and severe failure, they will doggedly maintain, even emphasise their existing Command and Control structures and unwavering reliance on best practice.
One of the commenters on my previous blog suggested the concept of the ‘Skunkworks Project’ as a possible solution. Skunkworks are small teams set up 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. They are basically unburdened by the ‘kill-the-chicken’ culture that predictably stymies new ideas. My own experience of skunkworks suggest they are effective for one-off, specific projects and they will invariably create new stuff. The problem always comes when trying to integrate the new innovation back into the business. 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 but it was never seen as a valuable idea within the wider company.
Commentators like Steve Blank suggest that while Skunkworks projects epitomise innovation by exception; to survive, organisations need innovation by design. Those last seven words hit the nail on the head.
So how do organisations do that? What are the different skillsets, policies, approaches and organisational frameworks necessary for innovation to become just another ‘one of the things we do around here’? There are several approaches, methodologies and disciplines that are well suited to dynamic, innovative environments and fortunately organisations and their staff can learn, become skilled in and apply these ‘alternative’ skills as easily as any of the traditional, best practice approaches. Before I explore some of these ‘alternative’ approaches, it is necessary to explore and appreciate when to use them. Otherwise it would be easy to substitute one ‘out-of-context’ approach for another.
And therein lies the challenge. If you take a problem to a person with a hammer; the solution will be a nail! (Attributed to Steve Dol: nz.linkedin.com/pub/stephen-dol/18/3ba/b49/en). 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 this sounds today, most organisations are now fixated on execution, with a multitude of best practices (allegedly) in support which they apply as a panacea to ANY situation, regardless of context.
Now all you Prince2 qualified Project Managers; please re-holster those shooting-irons! I’m not suggesting those best practices are wrong; but I am suggesting that hammers are great for banging in nails, but poor at cutting wood. Similarly with our organisational tool-set, you need to first understand the problem and use the right tool on it.
The question then is; what are the different tools, approaches and methodologies available to an organisation and in what context should each be used? When to use a traditional best practice approach (a hammer); and when to use something else (possibly a screw-drive, or a saw)?
The first step; determine the context, parameters and level of complexity with the business problem you are dealing with? How to do that?
The following section draws from the work of Ralph Stacey and his ‘Stacey Matrix’. It establishes a conceptual framework for understanding and managing complexity and, by extension, for understanding when to innovate; and use ‘alternative’ approaches and when not to; use best practice approaches.
In the figure below, along the bottom axis we move from being close to certainty to being far from certainty; the other axis, we move from being close to agreement to being far from agreement.
Rational Decision Making: At a point close to certainty and close to agreement is the Rational Decision Making environment. This is typified by strong cause and effect relationships with high levels of certainty and agreement about the nature of the problem, the intended actions and expected outcomes. Here; it is possible, and appropriate to utilise best practice approaches.
Beyond this ‘Rational’ area; different decision-making practices; indeed planning/policy approaches, implementation methodologies and organisational frameworks, need to be applied.
Political and Judgemental Decision Making: At a point closer to certainty but further from agreements political decisions occurs. Conversely, at a point closer to agreement but further from certainty, judgemental or intuitive decision making practices occur.
The Edge of Chaos: As we approach a point far from certainty and far from agreement, organisational frameworks of any sort, begin to break down. In this anarchic zone, progress is difficult. 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, possible solutions and expected outcomes. This is where most organisations trip up with best practice.
Most of our best practice relies on high certainty/agreement, strong cause/effect relationships and high-quality/complete data. In reality, at the beginning of any venture little is known and much is assumed. In spite of this you will invariably find assumptions underlying a plan suddenly treated as facts rather than as best-guess estimates to be tested and questioned. In New Zealand, evidence-based policy is now applied to every area of Public Policy and this has flowed into best practice decision making practices and execution methodologies which are applied indiscriminately to every situation. While these approaches are practical and appropriate in a rational decision making context, such initiatives are often doomed to failure before they start because of the complex and uncertain decision making environment they will operate in. The word ‘evidence’ is itself a dead giveaway.
How big an issue is this? In a 2011 Forte Management report they state: “New Zealand’s problem is not a lack of innovation but rather our inability to convert our legendary inventiveness into productivity, profitability and prosperity” and quote a 2003 OEDC report which, in referencing New Zealand, stated: “The mystery is why a country that seems so close to best practice in most of the policies that are regarded as the key drivers of growth is nevertheless just an average performer”. So yes, inefficiency is a big problem for New Zealand.
The Stacey Matrix; exquisitely simple as it is, can be a good starting point for organisations to first ‘diagnose’ the complexity of the problem they are dealing with before deciding on the intended approach. Just like post-WWII and penicillin, let’s stop throwing our favourite best-practice approach at everything and hope that something sticks and by some fluke, a project is successful.
In my next post, I’ll not touch on best practice as these are already well documented; if not understood but rather I’ll look at those ‘alternative’ approaches I’ve referred to and how organisations could learn and adopt these when they find themselves in that complex decision making environment. Why would they want to do that? My own experience suggests that these approaches can deliver what every senior leader craves; an unlimited capacity to respond to continuous change.
To see how LINQ can provide clarity in a complex decision making environment, please click below