Organizational Performance – Leadership – Culture – Resilience


Performance – No Matter What!

Performance (aka) efficiency is the paramount consideration for those governing and managing our organizations today, the one’s that purport to serve us, but which in reality rule us! As shareholders of these organizations, we demand improved returns and as stakeholders (consumers), we demand ‘more-for-less’; and sometimes, both. You could say that we are all covert Michiavellis!

Furthermore, society keeps on clamouring for more sophisticated products and services, but does not want to pay for them (more-for-less). In short, society (you and me) is ‘Addicted to Performance,’ the consequences of which are many (1). Suffice to say; this addiction traps organizations. They have no alternative but to engage in efficiency-seeking activities.

We are all aware of the exponentially increasing connectedness and interdependence of our globalized and urbanized society, but few appear to appreciate its fragility, that failure at some point time is inevitable, as indeed were the avalanches in Per Bak’s sand pile experiments. This age-old phenomenon of increasing complexity as sophistication increases also has a price tag – resilience. A price tag that as a society, we are for the most part, seemingly reluctant to confront. Indeed, we studiously avoid and are deliberately, and wilfully blind to it.

Hard & Soft Complexity

Complexity can be thought of, in simplistic terms, as being either ‘hard’ or ‘soft.’

Hard complexity is well-bounded and presents direct, and solvable challenges that have defined endpoints. Integrating and automating the materials and manual processes involved in making a latte, into a coffee machine is an example of hard complexity, as is the connecting several networks and integrating multiple systems into a single system.

Soft complexity,  on the other hand, is not well bounded and is more difficult to define, if indeed it can be defined. It involves the intangible human aspects of organizations: leadership, management systems, standards, relationships, culture, workforce motivation, etc. Only rarely, are issues of soft complexity resolved in the way that issues of hard complexity are resolved – directly. Instead, they are resolved in an adaptive manner, a way that involves not only engaging with the people who are the problem, but also working with them to resolve the issues, because the same people through ownership of the problem, are the solution.

Complexity Graphic

In their ceaseless drive for efficiency (the cost imperative), organizations downsize, restructure, automate, integrate and outsource. In doing this, they not only increase their hard complexity through the coupling and interlinking of systems, they also increase their soft complexity in an exponential manner (figure). In outsourcing, for example, organizations become totally dependent upon the capabilities of their contractors and those of their contractor’s subcontractors: their objectives, leadership, management systems, standards, relationships, culture, workforce motivation, etc. Outsourcing adds the dimension of the unknown and difficult to manage to soft complexity, as the oil and gas giant BP found to its great cost in the Deepwater Horizon disaster.

All too often, the outcome of our failure to recognize soft complexity is organizational failure of some sort: e.g. the Space Shuttle Columbia; RAF Nimrod XV230 and Deepwater Horizon disasters to name a few. In all three disasters, there was no awareness of the soft complexity issues that were embedded in the cultures of these organizations and their contractors, out of which the cascades of circumstances and events that led to the disasters, emerged. There was no mindfulness of the likely out-come and possible consequences of focusing on core production/service (revenue – value) generating activities at the expense of non-core activities. There was no awareness of the bow waves of unknown risk hidden deep within an organization’s soft processes that are the inevitable product of such focused activity.

Organizational and societal resilience is the casualty.

Anxiety Management

The phenomenon of Soft Complexity is compounded by the activities of humanity’s ‘anxiety management’ or ‘immunity to change’ system (2); a system that functions in a manner not dissimilar to the way in which our physical immune systems work. Anything that upsets occupational norms and expectations, and generates anxiety, can manifest in actions and competing commitments that effectively counter and render ineffective any espoused commitment, whether safety’ in the industrial realm, for example, or resilience to disruption in a more general context.

What the majority of organizations fail to understand is that change is an adaptive challenge. They choose instead to treat the very human issues involved in change transition as though they were technical challenges involving the resourcing and configuring of things like networks or supply chains. Michael Hammer (3) is reputed to have said some years after the publication of the book he co-authored that the human side of change is the neglected and indeed the overwhelming issue. Moreover, that the human side is much harder than the technology or process sides of change.

anxiety management

Let’s use the espoused commitment of the leadership (directors & senior executives) to improving the resilience of their organization as our example.

There can be no doubting the commitment of many leadership teams to improving the resilience of their organizations (Column 1). But, what management and workforce are actually doing can often be another matter altogether (Column 2). In our theoretical example, business as usual with an emphasis on short-term objectives, is the focus of management. Any task or activity that does not contribute to the achievement of short-term objectives is prioritized for completion sometime in the future, if ever! Non-core tasks and activities like resilience enhancement are under-resourced and if the workforce is under pressure, then the likelihood of non-compliant work practices is high.

Clearly, there is discontinuity or lack of congruency in our theoretical organization. On the one hand, leadership has espoused and committed to policy their objectives for organizational resiliency. On the other, something else is driving the system; the competing objectives (Column 3). These start with the Board requiring the achievement of short-term objectives to meet the demands of shareholders and stakeholder, even at the expense of sustainability and resilience. The workforce is focused upon core activities and the realization of personal career and financial objectives. These competing objectives effectively render null and void leadership’s espoused intents for organizational resilience.

Finally, there are the big assumptions (Column 4) that underpin that actions of management and workforce; what they are doing and not doing (Column 2). These assumptions are tacit, embedded in the unspoken and unseen culture of the organization. They reflect the way we do things around here. They also reflect the expectations the workforce has of the way its members will behave in any given situation.

These are the cultural imperatives of the organization, and it is these that are the challenge confronting leaders when they seek to change an organization to enhance its resiliency.

Anti-Resilience

What I have attempted to point out is that there are two major, and largely unrecognized ‘anti-resilience’ threats to organizational resiliency in today’s context:

  • Increasing Soft Complexity; and
  • The failure of leadership to recognize that resilience enhancement is an adaptive challenge.

The reality that we as members of society have to confront, is that we talk about enhancing resilience, but we do not address the issues that our ‘Addiction to Performance’ – our never-ending pursuit of efficiency creates (1).

The adaptive challenge before us requires that leaders engage with their people, because not only are people the source of the problem, they are also an integral and critical part of the solution. Resolving the issues inherent in soft complexity is not a technical challenge that can be solved by allocation of resources and a capital budget, the formulation and implementation of a project plan. There is so much more to the enhancement of resilience than the formulation of policy and procedure, one-off workshops, the formulation of plans and the annual exercise.

Now is neither the time nor the place to expound further, but there is much more to be said!

References

  1. Bircham, J.S. & Connolly, H.J. (2013). Addicted to Performance. Society Demands “More-For-Less.” Bircham-Global Publishing Ltd.
  2. Kegan, R., & Lahey, L.L. (2009). Immunity To Change. Harvard Business Press.
  3. Hammer, M. & Champy, J.A. (1993). Reengineering the Corporation: A Manifesto for Business Revolution. Harper Business Books.

Dr.  John S. Bircham

Published: May, 2013.
Copyright (C) Bircham-Global Publishing Limited

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