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candocontract
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12 Feb 2006
Posts:8

29 Mar 2006 10:08 PM

1 have marked this post as Insightful

The survey results are spot on. In asking, "where to from here?", I observe the outcomes and obsevations falling into two categories, from the perspective of general business:

Things that we can do something about - and that we must if our businesses are to survive
Things that we can do little or nothing about - but that we must seek to understand and that may present wonderful opportunities (they are only paralysing threats if we don't see them coming and don't deal with them)

While we all hope for the wisdom to discern the difference, I would definitely place in the first category the two issues that most relate to the way we manage. They are:

Increased connectivity and information overload
Corporate structure changes

Over a 40 year continuing career spanning government and business, working in both the "east" and the "west", I have been hearing people making statements like, "it's been a tough 12 months, but it will be better next year when we consolidate". And guess what?. It never is.

Complexity and turbulence are here to stay. Many of us pine for the "good old days" when the focus was on how well we were "buying-producing-delivering". Now, however, it is "starting-surviving-dying" that will increasingly dominate the cycle of competitive business. This cycle is in part the inevitable consequence of our now-irreversible micro-economic reforms. The reforms are overall a good thing. However, for some who have been wondering what is happening, the consequences have come as an unpleasant surprise.

The consequences are now here, and wishing for a return to the past can blind us from understanding and managing the future. And if we don't do it our competitors will do it for us. The sooner we learn to manage in the new environment, then focus on doing the management and doing it well, the better our individual business' chances of generating wealth.

Part of that solution will be the way we manage connectivity and information and structure our businesses. The remedy, I believe, lies in the way we as managers continuously develop in three areas - observing, doing and learning.

Observing the environment

One of the most important things for a manager and leader is understanding and explaining what is happening and how things connect and work in the environment of his or her endeavours, whether in commerce, government or non-profits.

Part of that understanding is a better appreciation of "complexity", and "adaptation" in the way people and organisations behave. "Complex Adaptive Systems" is an emerging stream of mathematics, of which as I listen to clients, few know. But within 3 years, I predict, every manager will need to appreciate it if his or her endeavours are to have real world success.

Doing the managing

The formula for succeeding in the new world will be to soundly integrate our specialist endeavours. This won't require yet another layer of management theory and new intitiatives. It will mean getting back to the essentials, seeing management for what it really is, and peeling back the obfuscating layers. These layers have made good management progressively inaccessible to the operational managers at all levels on whom business relies for its substantive success. This is the clarity for which we will need to aim.

Action learning

Understanding and doing both develop through learning. Learning is perhaps the only lifetime skill we need. It is applicable to all management competences, whether technical, relational, analytical, actioning, or decision-making aspects.

While all of these aspects (i.e. technical, relational, analytical, actioning, or decision-making ) interact, in the context of this comment, it is the last, decision-making, that deserves special mention. Although it can be extraordinarily difficult to do well, effective decision making is simple but needs to be learned. At all levels it involves an intentional, streamlined, structured, iterative process of analysis , consultation, communication, and action **.

The learning must be lifelong and must develop individually and organisationally:
individually - mainly through experiencing ones own failures and successes (and others' where they can be experienced vicariously).
organisationally - by promoting access to learning and sharing knowledge.

Write your own conclusion!

How well is "decision-making" being learned and practised? Readers might check seven areas for their own businesses:

Rigour and simplicity - knowing how to making sound implementable decisions is the one key management skill that has become increasingly inaccessible to the ordinary employee and manager (accommodating complexity and adaptation is part of that skill). The principles are simple and can be streamlined, yet are overlooked when the going becomes difficult.
Ubiquity - all employees are, at their particular functional levels, "strategic" managers. Even without supervisory responsibilities all people are managing resources, which, even if not tangible assets of the business, will include relationships (e.g. with customers or other stakeholders) and knowledge.
Alignment - when any one is not managing strategically in the interests of the business, total value (the aggregation of aligned individual contributions), and the prospects of success, diminish
Efficiency - while decisions may be detailed, management by detail will falter. It is not possible and highly inefficient for the CEO or Board to try to make all important decisions. When I see them trying to do so, I also see them failing to do their real jobs. Their task is governance - ensuring that the important decisions are made soundly and implemented well.
Integration & consultation - as work becomes more technically specialised, extra effort is required to bring the "silos" together, not just at the top but at every level.
Information - not too little, not too much, but available. Information incurs costs and time, but must be accessible to those who require it for assessing feasibility, projecting impacts and gauging uncertainties of decisions.
Accountability - diffusion of accountability remains as one of the most perverse features of management practice worldwide. Failure to properly frame and record decisions and their review, ensures that no one is accountable for their actions and discourages learning.

Systemic deficiency in any of these areas is a ticking time-bomb for your business. So, will it be better next year? A key pre-requisite will be everyone returning to the essentials, and doing them well.

_____________________

** The many formulations that exist for processes and structures required for sound decision making, in essence distil to the following seven steps:

situation - characterising the current situation and projections across the business and its environment,
gaps - identifying economic and interest group gaps in all areas covering waste, opportunities and stakeholder satisficers,
alternatives - generating then evaluating alternatives for producing priority improvements,
plan - charting the plan of action recommended and management arrangements,
reccommendations - framing "implementable" recommendations for approval or amendment,
implementation - implementing the plan as approved or amended.
review - monitoring, reviewing and as necessary adjusting the decision as commitments are made and results emerge

LarryQuick
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30 Mar 2006
Posts:2

01 Apr 2006 1:19 PM

1 have marked this post as Insightful

I think your opening argument that poses complexity & complex adaptive systems is spot on. However, your closing 'solution' of situation to review with an either or alternative with planning as the process is counter to the notion, practice and science of complexity. It sounds more like systems thinking - a first cut view of linear systems thinking and one that is still dominated by an industrial context and mindset. If I am way off track on this summation, please bring me back. I don't mean to critisize, but I am absolutely with you on the emergence of complexity, but, in such early days of fundamental transformation to 21st century based thinkming, I am very uneasy about process that pupports to be in the spirit and means of CAS, but is in reality a default to old newtonian, industrial thinking. Help me out here! Laz

candocontract
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Member Since:
12 Feb 2006
Posts:8

02 Apr 2006 1:24 PM

0 have marked this post as Insightful

Hello Laz - Criticism is appreciated, thanks, and in that spirit, I think you have hit on a fundamental conundrum in all this. I will try to respond as follows. (With more time I would have made it shorter)

An enterprise can't succeed in a (hostile) "CA" (complex-adaptive) environment without using CA tools, and yet defined-step processes are inherently non-CA, as they don't allow for adaptation (and may have limited scope for complexity).

The solution in part is to recognise that the processes of decision making are (and need to be) iterative, recursive, and multi-level.

By this I mean that decision-making can be (and in practice is) broken down:

the steps can be conducted with feed back from outcomes (learning more with each successive iteration) and anticipation of the outcomes. So the seach for alternatives is itself an intelligently iterative process. (The feedback paths can multiply [e.g. in a larger enterprise] as one can learn and innovate from the experiences of others in different contexts)

each step requires one or more decisions itself as to the way it will be conducted (indeed the way that decision-making is conducted itself requires decisions).

each decision at one functional level produces an implementable plan, and implementation then requires decision-making at the next level of detail. Review of implementation may lead to revision of the plan. e.g. anticipation of delay may lead to increasing resources deployed or relaxing the plan's time line

If each representative person in an endeavour (I prefer this term as it is more general than business or organisation) who is affected by a decision is consulted at an appropriate functional level, has adequate information and motivation to align him or her to the endeavour's overall objectives, and has potential to influence the manner of implementation at that level of detail, then the decision-making moves towards taking on features of a CAS.

There are limits to this, due to (a) the fact that managed work at some level of detail becomes a defined-step process, (b) there are only so many people available to be consulted, and (c) costs will constrain how much analysis and consultation etc. can take place to support any decisions. So the concept of a CAS as entirely open, distributed and continuous, has limits in practice, but they are limits relating to "materiality" (i.e. in evaluating an alternative one does not look at impacts outside the judged limits of relevance or cost-effectiveness) rather than arbitrary or pre-defined boundaries.

So, what I am trying to describe, rather than being conventional systems thinking or procedures, is an "approximately" CA "approach" to the way decisions are made, or to the decision-making "ethos". That eitos will allow for mistakes to be made and used to provide valuable lessons, and for everyone being adequately informed, well-led, and engaged and having opportunity for learning and contributing. More important is that if any of these features of the ethos are missing (in a material way), then the decision-making will become less sound and the endeavour will lose value. Its capacity to deal with complexity and adaptation will be restricted by its own inability to adapt.

Having said all this, I know that I have not demonstrated that my proposed approach is "optimal". It is my attempt to distil a little wisdom from a varied career, including the last 15 years working with others in a network with more / better experience than me. My concern has been that if one simplifies ideas too much, they start to look obvious or banal, or lose the essentials. Yet the messages must be simple if the proposed approach is to spread.

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