In the long run we are all dead – John Maynard Keynes
The economic concept of the long run is the period that it takes to be able to change every variable in a system. It is the time it takes a system to adapt fully.
The long run defined this way is a handy concept for an organisation to use when thinking about change. Your most disruptive threats will pick the variables that you find hardest to change. Because you cannot or will not change these variables quickly then you will be in danger of losing value to the disruption. For example:
- newspapers: struggled to change an economic model where advertising in the paper funded content to attract an audience when internet businesses offered alternatives for both advertisers and audiences
- music industry: struggled to change their ways of identifying and managing talent and the economics of distribution models tied to physical distribution when digital music distribution disrupted both
- premium airlines: struggled to change high costs of labour, fixed cost infrastructure and the value perceptions of their other premium offerings when low cost competition attacked
If you want to improve your organisation’s ability to respond to disruption, you need to shorten the long run, your adaption time, by speeding up your slowest areas of change. In most cases these will not be simple decisions. The slowest areas of change are often those deep in the hidden infrastructure of the organisation.
One thing you can do is invest in capabilities to help you change all areas of your business more rapidly:
- people capabilities: change leadership, talent, agility of structure and performance measurement
- system capabilities: flexibility of systems, agile development, standardised integration and ability to leverage new technologies in experiments.
- process capabilities: continuous improvement, process measurement, agility of change, etc.
The long run is also the end of the period when the ugly impacts of disruption are felt. We would all like to move faster through the periods of confusion, pain, adjustment & loss and get back to competing aggressively to win.
Ultimately, it comes down to the culture in the organisation. Can you build an organisation that has a long run that suits your business and its environment, where you can change the way you think and work fast enough to survive?
If you can’t shorten the long run, then you can guarantee in an era of disruptive innovation, your organisation will be dead.
“I was gratified to be able to answer promptly, and I did. I said I didn’t know.― Mark Twain
Knowledge in flight – faster flight
Nobody wants to accelerate the velocity of knowledge as speed for speed’s sake. If anything one of the challenges of the digital age is we have to much quick data and information. Instead, we need to accelerate the effective use of knowledge to create additional value across the organisation. To do so, we will need to accelerate the sourcing, sharing and the practical application of knowledge.
How to accelerate sourcing, sharing and use of knowledge?
- Map expertise and tacit knowledge: Tangible knowledge is increasingly searchable. However too many talents are hidden inside people’s heads. Do you know all the Postgraduate degrees that your team has? What about their blogs, conferences, memberships and followers? Networks, skills and experience may not align with roles or responsibilities
- Reward frequent flyers: Encourage people to share all of their expertise and to explain aloud the tacit knowledge to benefit others. Track successful contributions back to source & give credit. Celebrate people’s talents and reward their many contributions beyond their roles. Build this practice into your organisational culture & systems.
- Increase flight connections: The better connected the networks of knowledge in your organisation and your organisation to others the more ways there are for knowledge to flow. Work to network your centres of excellence, gurus, communities of practice internally and externally. If you use an enterprise social network or external social networks focus on building following and using @mentioning to add new connections and trace paths to knowledge. Importantly this also incease the opportunities for serendipitous meetings to add value.
- Build flight paths & schedules: You travel faster on paths that are mapped in advance and where your path is managed for you. If there are common requests or known experts, make those paths easier to navigate. An operating rhythm of sharing allows everyone to plan and participate in a consistently level of the activity. It may also mean getting slow moving traffic or lower value out of the high traffic routes. Regular moderated Q&A sessions or knowledge cafes can be a great way to deliver this rhythm in an easy way.
- Manage delays: Some times a stop-over allows the overall journey to go faster. Include time for thought, reflection, planning, documenting, feedback, learning, sharing, collaborating and addressing issues in execution.
- Reroute flights: Avoid single points of failure for the flow of knowledge in your organisation. Who else knows and could help if something goes wrong? What other ways can people access this knowledge? How do you share jams (leave, large projects, heavy workloads, etc) publicly to let people route around the issue themselves?
- Cancel flights quickly: Mark Twain’s quote above is amusing but it underlies a truth. Organisations which have a culture that allows people to admit lack of knowledge, errors and doubt can move faster and far more effectively.
Data and information is flying around faster than ever. Even so, we would all like to accelerate the flight of knowledge that can add value to our organisations.
What are you doing to accelerate your organisation’s knowledge in flight?
The traditional models of leadership focus on clear instructions and measurement of specific actions. Hierarchical command and control was developed in military organisations intent on bring order to the disorder of large numbers of people on complex battlefields. In a rapidly changing world, there’s a danger that this command and control model completely breaks down – too slow, too rigid and too ineffective to achieve its goals. In many cases, the first people to change their thinking have been the military
Years ago, I heard a talk by Lieutenant Colonel James McMahon who was at one time commander of the Australian SAS forces in Afghanistan. His advice to a group of aspiring business leaders was always explain what was known of the situation and be clear on the purpose, but never dictate how the mission should be achieved. Highly engaged, skillful and creative teams will find ways to deal with complexity and change that will achieve the mission and surprise you. His stories of the resourcefulness of Australian troops in a complex and changing environment were remarkable.
The role of leaders is to set a purpose and a context and to enable people to act fast and effectively on their own decisions to achieve success. US Air Force Col John Boyd described the concept of the OODA loop. The OODA loop highlights that there is strategic advantage in being faster than competitors at observing, orienting, deciding and then acting. Organisations that are quicker round this loop will be harder for their competitors to predict, have a better view of competitor’s actions & intentions and be better at execution.
Clarifying purpose and context accelerates teams through the Observe and Orient stages of the OODA loop. Activities like briefings, induction, Scenarios and role plays are great to help people to build understanding and skills in anticipating what might be encountered. They know faster where they are and where they want to go.
Building enablement will accelerate the ability to Decide and Act. However, you need to choose and skill people for their ability to decide and act to achieve success on their own. You also need to leave decision making in the hands of the individual to act and respond to the changing circumstances that they see.
There are always trade offs. Maybe the observation and orientation won’t be perfect on the ground, but it is rarely better at a distance. Maybe the decision making and action won’t be as sophisticated as it could be, but speed and adaptability is usually more important than perfection.
Give up a little command and control. Focus instead on providing purpose and context. Then enable your teams to adapt with maximum speed and effectiveness.