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| Looking up at the bow of the Cutty Sark - Greenwich, UK Strategies of shipping have changed since this was the fastest ship on the sea... CSD 2015 |
Hello, Readers! This week at The Educated Leadership blog we’re going to look at companies that have moved from away from silos and matrices as organizational forms and adapted a Complex Adaptive System (CAS) (Obolensky, 2016, p. 22-27). CAS companies are unlike the other two styles in that there are few if any, designated leaders. Employees are expected to hold themselves and their peers to a high level of performance. The employees are expected to know and understand their business, their competitors, the business environment, and the capabilities of themselves and their co-workers. Instead of a centralized leadership directing the employees, the employees confer and act in the manner needed to move the company forward.
There are few examples of companies that truly operate in CAS fashion. Rick Wartzman noted, “” A recent survey of more than 36,000 employees in 18 countries, by the consulting firm LRN, found that only 3% of companies can be characterized as substantially self-governing” (Forbes, 2012). The style is complex and requires time and attention to detail that many companies simply cannot spare. Many executives that have visited Morning Star, a company in California famous for using CAS, attempt to take the ideas they learn home and get bogged down trying to implement them. “An advantage for Morning Star is that its founder, Chris Rufer, started with a clean slate some 40 years ago. Trying to retrofit an existing business with Morning Star-like principles is far from easy” (Wartzman, 2012).
Another issue that impedes companies trying to make a shift to less/little designated management is the time required to adjust. With shareholders and others looking for short term returns on investment, the time to shift culture and structure is often too steep a price to pay.
However, there are positives to take away from the stories of Morning Star (Hamel, 2011) St. Luke’s (Coutu, 2000) and their use of CAS. Both companies have driven the expectation of accountability and performance down through all members of the organization. They have made their workplaces safe for people to call out others’ performance, both good and bad. They have provided comprehensive training for all employees (even contract labor). Installing these cultural mores into my organization would be challenging, but wonderful, I believe. The way CAS organizations operate allows the company to see and react to changes in the market and the economy with better foresight and capability because all employees are looking for ways to help the company succeed, not just themselves. I wonder if the Titanic would have made it to New York if everybody on board had been looking out for danger that night…or in the design stage…or the build stage…or the “How many lifeboats should we have?” stage.
Applying strategy and reviewing strategic plans are difficult because the return on the time invested is rarely apparent. I enjoyed Martin Reeves TED Talk (2014) about changing the way one designs and applies strategy depending upon the situation one is in. I believe it ties into the reading on CAS we have done because it highlights the fact that not all companies can be as dynamic as others. The reasons for this lack of flexibility can vary, but include, regulatory constraints, labor constraints, and the competitive landscape. Reeves compares the malleability of the company and predictability of the market in which they operate to divine the style of strategic thinking that may work best. The graph he produces reminds me of the Cynefin Framework (Cognitive Edge, 2010) of situational complexity decision making that we have talked about in other lessons. The four quadrants moving clockwise from the bottom-left, are Classical, Adaptive, Shaping, and Visionary. Classical is the standard mode of making predictions, making plans and moving forward. Adaptive is where the plans are built but are reactive to the unpredictability of the market or the competitors. Shaping is the “Wild-West” of strategy. In this area, the plans are so new as to define the market and be relatively free of competitors…for at least a little while. Visionary is where the plans go in ways that few others have seen and the begin to change the paradigm in which you operate. The area of chaos on the Cynefin chart is reflected by Reeves as an area of renewal where the company’s near-term survival is so doubtful the plans need to be all but scrapped and recreated to allow the company another day of life.
Moving strategic thinking around Reeves graph won’t occur at the same level of dynamics that a leader may move around a Cynefin graph. That’s a great lesson for me. The other lesson is that strategies will need to move as the environment in which they are created morphs into new levels of predictability, no matter the malleability of the company. My company is usually quite rigid and classical in its strategy. I see now how different teams have made dramatic achievements in that environment by moving toward the other three zones, depending on the opportunities and challenges their leaders have identified. We can all use the examples from Reeves to contemplate the strategy of our strategy.
Cognitive Edge, P. D. S. (Producer). (2010). The Cynefin Framework. [Film short] Retrieved from https://www.youtube.com/watch?v=N7oz366X0-8&feature=youtu.be
Coutu, D. L. (2000). Creating the Most Frightening Company on Earth (Vol. 78, pp. 142-150): Harvard Business School Publication Corp.
Hamel, G. (2011). FIRST, LET'S FIRE ALL THE MANAGERS. (cover story). Harvard Business Review, 89(12), 48-60.
Institute, T. (Producer). (2014). Martin Reeves: Your Strategy Needs a Strategy. Retrieved from https://www.youtube.com/watch?v=YE_ETgaFVo8
Wartzman, R. (2012, September 25). If Self-Management Is Such a Great Idea, Why Aren't More Companies Doing It? Forbes.
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