Working as a strategic adviser in any organization is a tough gig at the best of times. So many expectations heaped on the shoulders of one individual or a small team. Soft systems related to culture usually hold the solution to what’s amiss, but that’s not where management consultants are taught to look. Most of the large consulting firms start by analysing the numbers. Sticking to a suite of remedies that seemed to work for a while in previous assignments, rather than mapping the social dynamics of the system they’re intent on changing, their analysis can become constricted and veer so far off track as to be utterly misleading.
Yes, it’s negligent, but understandable. For a start they don’t have requisite variety or sufficient local know-how to make sense of what’s actually going on – preferring to focus their attention on a few easy rules of thumb, such as cutting costs or proposing staff redundancies, than finding more nuanced answers. Nor do they have the skills to observe and map the organisational system in real-time to achieve more precision. Besides their business model requires them not to solve problems but to secure the next contract from their client.
But let’s not be too virtuous. Seeking easy answers to complex problems, or complex answers to simple problems, can both lead to confusion and misunderstanding.
Over decades of running businesses and counselling executive teams I’ve learned not to act prematurely. The source of the most complex problems seldom appears in full view. Rather it is the predictable result of how a process was designed in the first place. What we assume to be the root cause of a problem is often just the tip of the iceberg - surface ripples being the most visible symptoms of a far more ingrained design issue.
So when you think you know what the problems are, just stop for a moment, put aside any data suggesting an immediate solution and interrogate upstream patterns that are slipping and sliding under the surface of your perceptions. Then, and only then, will you see that things are not necessarily always as they seem.
Here are my favourite causes of operational dysfunctionality that are commonly glossed over or totally ignored:
1. Recruitment: Generally speaking most advertisements focus on the need for specific instrumental skills and technical expertise. Often these are divorced from the context in which such specialist knowledge will be applied, or dissonant with the values and behaviours needed to achieve specific outcomes, as variously conceived and communicated. Poor interviewing techniques, an inability to delineate critical responsibilities, and a lack of clarity regarding core deliverables, will often result in the wrong people being chosen for the job.
2. Orientation: If induction to the organization, its purpose and practices, is not comprehensive, and new senior hires are casually parachuted in with only a personal set of unadjusted interpretations of their role, confusion is going to reign. In additon, if their inclination is that of a ‘saviour’ they will confidently implement these misinterpretations, even when they are observably in conflict with the rest of the organization. Staff who report to these executives will swiftly become confused and disengaged.
3. Communications: Most senior executives are convinced that their carefully crafted proposals and messages, conveyed with clarity, are responsible for organisational performance. Actually gossip, out-dated messages, informal chit-chat, hearsay, and a myriad chance observations, have greater influence in driving (or limiting) what is ultimately achieved. Compared to formal edicts from the cathedral’s cardinals, very often announced from a pulpit of secrecy, tittle-tattle from the organisational cafe propels performance more effectively. Change is best realized when the cardinals find ways to hijack and manipulate the free-flowing space of the cafe rather than relying solely on formal instructions and commands.
4. Viability: There are five critical interdependent systems needed for any organization to remain viable: that is the ability to persevere in the face of sudden or unpredictable change. Clarity of purpose and direction, operational alignment and efficiency, monitoring and control mechanisms, sense-making of ambient information, and consistency and coherence of messaging. If flaws arise within any of these systems, or connective tissues fracture, the ability of the organization to cope with uncertainty will be greatly hampered.
5. Gravitational Pull: In cultures where it is unacceptable to make a mistake, and play is outlawed, fear will embed the status quo. Past events will generate a gravitational-like force, locking in old ideas and practices. This is known as path dependence and it features prominently in explaining the inertia encountered when trying to implement large scale change. Path dependence means that even if previous decisions were made arbitrarily, accidentally, or with limited information, and with far better options now available, it’s often easier to just continue on a pre-existing sub-optimal path than to create an entirely new one with all its inherent risks and cost. It means you are constantly trying to overcome history, as witnessed or assumed.
6. Theory of Change: Shared understanding is vital in any organization. Agreements that define success and what it will take to get there is critical in terms of stakeholder alignment and the evolution of a consensus regarding organisational purpose. If organisational strategy demands adaptiveness and transparency, when executives insist on rigid rules and efficiency, cracks will open up in the culture, becoming more and more disruptive over time. This also occurs when senior executives disagree with each other privately and feign agreement in public.
7. Default Mode: If critical systems of organizing are non-existent or evolving too slowly, practices and routines will bow to a default mode base on power games and politics. For example, if HR management practices are unclear or embryonic it is likely that legal solutions will become the default mode of operating. This can give comfort in a compliance and contractual sense, while creating emotional turmoil and disruption in terms of career continuity and relationships.
8. Cost Cutting: Cost cutting is not a strategy. At best cutting costs with the singular goal of realizing short-term savings is myopic. Taking a one-off approach to cost cutting, or doing it reactively when it’s the only obvious option for reaching profit targets, is also foolish. Unfortunately, in the hurry to eliminate things that seem discretionary, executives often sacrifice some of their most important tacit investments. When cost-cutting programs are implemented too hastily, and there is little (if any) debate over the strategic intent behind spending, organizations are inevitably left weaker, unstable, and in some cases desperate and without direction.
9. Context: Good decisions invariably take contextual dynamics into account. Misreading the context, particularly the volatility and speed of change, can result in decisions ranging from being mildly inconvenient (in other words they can probably be revised or rescinded without causing too much harm) to high-risk (where even a rapid turnaround intended to limit damage will have some negative consequences). On a spectrum ranging from the simple, where more or less everything can be predicted, to the chaotic, where we can be certain of nothing, even taking prior performance into account, incorrect analysis can lead us in the totally wrong direction.