Tag: experimentation

Competency vs Capability Mindset: The Organisation

Posted on by simongterry in Learning

Design your organisation for the potential of its people and their capabilities, not the limits of an expertise.

I recently noticed that Capability or Competency? Mindsets matter was the second most read post on this blog. Part of the appeal of that post is that it addresses a critical shift in mindset for those grappling with the new dynamics of the future of work. We stand facing an organisational version of the personal insight Marshall Goldsmith described succinctly as “What Got Me Here Won’t Get Me There”

Competency-led Organisations

The Core Competency concept introduced by Prahalad and Hamel refined a concept that had been strong in management for decades. It is undoubtedly true that organisations compete by being better, more competent, at something than their competitors. However the mindset of being more competent differs from a competency. This subtlety was often lost as core competency flowed into the mainstream of management thinking.

The focus on core competencies created a mindset that organisation gets to choose its competencies as part of a strategic planning process and should set targets for competencies to fulfil its strategy.  While Prahalad and Hamel spoke of the need for organisations to look forward to assess and build their competencies, much of the focus in organisations has been historical. The biggest outcome of the discussion of core competency has been a narrowing of organisational ambition and a focusing of activity on historical strengths. “That’s not our core competency” is more common than “We can leverage core competencies”.

Influenced by themes that go back to the beginning of scientific management, we have turned core competencies into rigid processes, standards and policies. We have judged these competencies by what sustained competitive advantage in past markets. We have spent less time on the changing customer perceptions of value and the ongoing dynamics of the future marketplace driven by new competitors. The list is long of disrupted organisations who felt safe because a new entrant lacked their core competencies. In many cases the infrastructure to reinforce and sustain these core competencies became a burden in their ability to adapt and survive. 

Capability-led Organisations

The Big Learning mindset that pervades the future of work highlights that competitive advantage in the next century is based on the ability to build the capabilities required to compete in an environment of uncertainty. Rather than specifying a fixed goal of competency, we seek to build an open capability to fulfil our strategic intent and our customers’ needs as they arise.

Adapting organisations to foster autonomy, learning and change is what enables people to build the practical capabilities necessary to learn, grow and execute. The process you inherit is less important than the customer insight you gain in working to meet your customer needs. Prahalad and Hamel reinforced that in Competing for the Future their update of the core competencies discussion. The discussion on the need for organisations to build open capabilities that can help manage and drive adaptation.  These capabilities include openness to their networks and environment, collaboration, ability to learn, share and drive change. Critical too is the development of purpose as the new focus for organisational activity and the inherent rationale for groups of people to come together in work to benefit others.

Design for Capabilities

Responsive Organisations need to design for a capability-led response to a uncertain future. They need to develop core Big Learning practices like working out loud, personal knowledge management, adaptive leadership and experimentation. They need to design their organisations to allow individuals and the collective to focus on the realisation of purpose.

This organisational design will leverage networks, transparency, autonomy, experimentation and the inherent motivation of employees in ways that we have not yet seen. Developing a new competency in holocracy, agile, lean product development, design thinking, big data or any other single practice is not enough. An organisation must build the capability to continuously adapt to customer needs in a changing market.

Ultimately, it will also focus organisations more strongly on realising the potential of people, customers and other stakeholders. We need to design our organisations to build the capabilities that realise human potential. That can only help make work more human.

The Normative Value of Failure Comes from Your Next Act

Posted on by simongterry in Uncategorized

Embrace failure. Fail fast. Fail small and early. Everyone has failures. Few failures are fatal. 

Despite all the good advice about failure, people find it very hard to sit comfortably with failure. When outcomes matter and achievements are celebrated failure is often a disappointment regardless of the amount of official imprimatur. Failure attracts a whole lot of personal and cultural baggage. This is a significant issue when willingness to risk failure is a large part of an organisations ability to adapt.

Reading The Pirate Organization by Durand and Vergne gave me a somewhat different perspective on failure. Noting that many pirate organisations were short-lived and easily defeated by the forces of the state, Durand and Vergne still noted that pirate organisations helped establish new norms for international trade and even the way organisations worked. Pirates showed where states were weak, where trade was broken and where traditional organisations needed to become more agile and adapt. Their thesis is these fragile and often failing pirate organisations are a critical part of the process by which sovereign states and capitalist organisations adjust to new territories of economic endeavour.

Failures Create Norms Too

Projects that end in failure can play a critical role in defining norms in an organisation in a similar way. They also set norms that shape future activity as well. Failure draws human attention and with that attention there is a chance to influence the way that people perceive culture – the how we work around here expectation. Critically culture is an expectation of how we will interact. It is shaped more by what you do about failure than what you say.

Failure has a big influence because the activity that follows failures sends signals that shape people’s perspective on a few key elements of organisational activity:

  • People worth supporting: How do you treat those whose projects fail. Give them the plum choice of the next project. Support them to learn what they need to learn to make their next efforts more successful. Whatever you do, don’t pretend the failure didn’t happen. They know it did. Hiding it loses the lessons and the uncertainty of silent treatment can be worse for people involved than blame. 
  • Purposes worth achieving:  The surest way to signal that a purpose is important, is shared and is worth achieving is that people persist after a failed attempt and start developing new ways to achieve the goal based on the lessons from the failure.
  • Problems needing fixes: Failures often highlight problems in supporting areas, systems or processes that need attention. This is how lessons are revealed by a chaos monkey. Whether or not people are prepared to learn and adapt to remedy these problems following failure is a major signal of the culture of an organisation. Do nothing and you can’t expect anyone else to care for those issues.
  • Ways worth working: Failures often take down more than just a specific objective or a specific project. Small specific failures in organisations can be used as a weapon to sabotage wider transformations, particularly ones that change the way an organisation works. We’ve all heard some version of the refrain of the cynics “How can they succeed in the whole organisation if they can’t get their first pilot to work?” Whether an organisation persists, adapts or abandons a new way of working following a related failure sends a critical signal.

Norms Come From Actions. Not Posters.

You are going to struggle to convince people that you love and desire failure. The achievement orientation in your organisation culture will work against you all the way. Hiring a few change agents will help show tolerance and foster some adaptation but it won’t necessarily make failure acceptable.

Take down the posters encouraging people to risk failure. Show them instead how you act after failures happen. That moment is when you get to signal what matters to your organisation in terms of purposes, people and processes.

Corporate Chaos Monkeys

Posted on by simongterry in Uncategorized

The resilience of your organisation depends on the people willing to risk breaking things.

Bringing Chaos

Chaos Monkey is an open source application created to test the resilience of web services. By intentionally creating failures in random ways, chaos monkey helps engineers discover where there are shortcomings in their systems.

Many organisations have business continuity tests to help them learn how to manage failures. These exercises can be valuable learning experiences when done well. However, many are also predictable, formal and artificial.  (If your business continuity test isn’t allowed to fail you won’t learn anything) Further many of these tests don’t go far enough because they test the continuity of defined current systems and processes internally, not the resilience of these in a wider dynamic ecosystem. 

Chaos at the Centre and the Edge

How do create a corporate chaos monkey that helps your organisation learn how to improve its resilience in a rapidly changing environment? 

Experiment.

Creating a way for your people to run small scale tests of new ways of working, new processes, new products and services acts as a chaos monkey in your corporate environment. Lots of change and experimentation will expose your weaknesses and keeps you engaged with the dynamic environment around your organisation. This is the usually reason that wide scale experimentation is resisted in large organisations. However, experimentation lets you learn and build capability to fix issues when they are still small. Experimentation builds resilience.

In most complex systems, the traditional approach of defence from failure will fail anyway. Building the capability to learn and adapt to failure is far more valuable than a Maginot line of corporate defence. Experimentation will help supply the needed chaos at the centre and the edges of your organisation.

Once you accept that a little chaos is required you need your own monkeys to bring chaos. Find and embrace your Change Agents. In every organisation there is someone willing to risk breaking something to make the world better. Change Agents are the corporate chaos monkeys.

Every responsive organisation needs its Change Agents to bring just the right amount of chaos, adaptation and learning.

Leadership in Transformation

Posted on by simongterry in Change, Future of Work, Leadership

A common topic of debate in the Responsive Organization movement is whether an organization can become responsive or it must be born that way.

Undoubtedly many of the leading case studies of future of work organizations are organizations created or rebirthed from near death by charismatic founders. Some use this as evidence that the elements of a responsive organization must be present from the beginning. In a previous post, I pointed out that we cannot rely on transparency alone to make change occur for us. The power structures in a traditional organisation will prevent most radical change.

I am unambiguously in the optimist camp. I am not alone and the company in the optimist camp inspires me. I have seen organizations change enough to not recognise their former selves. Change to more responsive ways of working is possible. The question is how.

What gets in the way

Chris Argyris’ classic article Teaching Smart People to Learn is a rich source of observations of what gets in the way of a Responsive Organization transformation.  In particular, Argyris notes that:

… There seems to be a universal human tendency to design one’s actions consistently according to four basic values:

1. To remain in unilateral control;

2. To maximize “winning” and minimize “losing”;

3. To suppress negative feelings; and

4. To be as “rational” as possible—by which people mean defining clear objectives and evaluating their behavior in terms of whether or not they have achieved them.

The purpose of all these values is to avoid embarrassment or threat, feeling vulnerable or incompetent. In this respect, the master program that most people use is profoundly defensive. Defensive reasoning encourages individuals to keep private the premises, inferences, and conclusions that shape their behavior and to avoid testing them in a truly independent, objective fashion.

These hidden values in most organisation get in the way of the transparency-led transformation that many hope to see. The Responsive Organization poses a threat to control, a threat of losing and negative feelings. Importantly the delegation of authority in a Responsive Organization may cause people anxiety as to objectives and rationale for action.

The role of leadership is to act as a counterbalance these natural human values and shift the behaviours to that of a Responsive Organization. We need to create rationales for action more powerful than embarrassment. We need to create community to generate trust, support and connection. We need to enable learning through conflict and experimentation. 

Purpose:

Leaders must create a strong rationale for the transformation. In cases of crisis, startup or near death of organizations, this rationale can often be imposed by a charismatic individual. The external circumstances enable a threat based narrative to bind people together in a defensive rationale for change.

However, most organizations are successful to their own terms. As Argyris notes, we want to feel successful even if our results don’t pass external muster.  

Leaders need to leverage two elements to create a strong rationale for change in this context:  

  • The Purpose of the organization: a purpose is the ultimate rationale for why people come together in an endeavour. It defines the common impact the group of people wish to have on the world.  As a higher agenda, it is the perfect rationale for change for even the most successful organisations.  Purpose is a mastery quest. Very few organizations have the capability to completely fulfil their purpose. They can however strive to better realise it.
  • External orientation: No closed system will find a rationale for change. External orientation is where organizations find the challenges and opportunities that define the purpose into specific improvement opportunities. Leaders need to relentlessly focus the organization on its customers and community to see transparently the challenges and opportunities that exist for change. Well defined external impacts in this community will be what can drive the autonomy of teams in the organization.  Using customer and community data in line with Purpose, also enables change agents to overcome embarrassment-based resistance in the organization.

Community:

Individuals will need support to take on the risks of a Responsive Organization. The role of leaders is to create the sense of community that will support an individual through that change. At the heart of that community will be engagement with others and a growing sense of mutual trust.  Leaders set the tone for any community. They must also work hard to reinforce these key community behaviours

  • Engagement: Engagement begins with transparency and connection. I cannot truly care about the others in my community until I know who they are and understand their purposes, concerns and circumstances. Leaders need to create the conditions to enable people to be more social, to connect, to solve and to share their work challenges together.
  • Trust: Engagement will build trust as it builds understanding. Transparency will reinforce trust. However, leaders need to take on the role of fostering responsibility and accountability as engines of growing trust in the organization.  When people see that individuals and teams are accountable for driving change then they will have greater trust in the change agenda.

Learning:

This post is deliberately not titled like a listicle e.g. ’The 3 or 6 things to transform an organisation’. Even a basic familiarity with change highlights that formulas will work only up to a point. Leadership needs to be adaptive to enable any system to change in a sustainable way.

To be true to their purpose and stakeholders, to leverage the potential of their community, each organization will take an unique path through change.  The role of leaders is facilitate the individual and organizational learning required:

  • Experimentation: creating a culture of rapid iteration to address challenges and opportunities will accelerate the cycle of learning in the organization. Leaders must help this experimentation culture to overcome the resistance identified by Argyris and also to spread and have a wider influence in the organization. Lessons learned must become new truths which will take a sense-making role for leaders in the wider organization and mean leaders must champion new ways of working when they arise, whatever the personal costs.
  • Conflict: The biggest reason that organizational transformations fail is an unwillingness of the leadership of the organisation to allow uncertainty and conflict. Conflict will happen. The uncertainty associated with conflict is inevitable. Efforts to suppress this will either undermine transparency, the rationale for change, engagement or learning. Failure to embrace conflict takes many names: politeness, bureaucracy, politics, corporate speak, history, culture, etc. Failure to embrace conflict is an unwillingness to learn and improve. There will always be resistance when change comes and it must be addressed. Leaders need to create and sustain the right kinds of constructive conflict – driven by purpose, based in facts from an external orientation & experimentation, mediated through an engaged community. 

Change is Coming. Lead.

I have seen the potential of purpose, external orientation, engagement, trust experimentation and conflict to drive change. Supported by leadership these are the elements of each organization’s transformation. These elements are critical to a Responsive Organization.

Throughout this post I have referred to leaders and leadership. This need not be hierarchical leadership. Clearly it helps if leadership and power are aligned in an organization in reinforcing the need for change. However, the changes described above are not capable of being implemented by top-down edicts. These changes must come as individuals and groups discover their power and are influenced as a result, This kind of leadership relies on influence and can begin bottom up or even from the middle management so often scorned in organizations.

Change is possible. Change is coming. Smart people can learn. Your people and your organisation can better realise their potential and their purpose. A Responsive Organization transformation will occur if you are prepared to lead the change.

Lead.

The Responsive Bank. Feature article in Q factor Oct 2014

Posted on by simongterry in Uncategorized

Feature Article on The Responsive Bank as published in Q Factor October 2014 issue by SQS.

Responding to a disruption and applying the Responsive Organisation principles to financial services

Note: the reference to an MBA in the bio at the end of the article is an error.

The Responsive Bank. Feature article in Q factor Oct 2014

Start small. Start now.

Posted on by simongterry in Uncategorized

Each journey of a thousand miles, begins with a single step – Lao Tsu

If you have time to email, then you have time to work out loud. Find one email to reply out loud instead. Repeat.

If you have time to talk, then you have time to lead. Find one person to influence. Repeat.

If you have time to do, then you have time to experiment. Find one hypothesis to test in action. Repeat.

If you have time for a meeting, then you have time to start a movement. Find a group to engage in a purpose and action. Repeat

If you have time for a coffee, then you have time to learn. Find one moment to reflect on how to do better. Repeat.

If you have time to fix, then you have time to make change. Find one way to make the system better. Repeat.

Small scale changes accumulate given the time. Small interactions reinforce change and build community.

You have the time and the work. Start now. Start small. Repeat.