Archive for the ‘Organizations’ Category
Perceptions of change
Management, as it is taught in business schools, is rife with abstractions such as “strategic alignment” and “organizational culture”. The incident I’m about to relate happened about nine years ago, a few days after I had read Claudio Ciborra’s brilliant critique of strategic alignment and published an article about it.
I was at a company dinner where I happened to be sitting next to a senior executive from headquarters. At that time the organization was in the throes of a large-scale IT transformation initiative aimed at “aligning IT with the business.” As might be expected, the conversation turned to the impending changes and how they would achieve “strategic alignment.”
Perhaps unwisely, I started talking about Ciborra’s critique and the gap between management abstractions and coalface reality. The conversation segued into the differences between management and employee perceptions of the changes we were going through, and at some point I said, “employee perceptions tend to become their reality.”
The executive set his fork down on his plate. “You’ve got that wrong,” he said with a tight smile, “my perception is your reality.”
–x–
Management theorists invented the concept of organizational culture to deal with the “problem” of aligning employee values with those of the organization. However, as noted in a classic paper by Hugh Willmott, the concept is inherently flawed, not to mention a shade Orwellian:
“[the notion of organizational culture is based on] an implicit understanding that the distinctive quality of human action, and of labour power, resides in the capacity of self-determination [of purpose and action]. This insight informs the understanding that corporate performance can be maximized only if this capacity is simultaneously respected and exploited…corporate culture invites employees to understand that identification with its values ensures their autonomy. That is the seductive doublethink of corporate culture: the simultaneous affirmation and negation of the conditions of autonomy.”
And then, a bit later in the piece:
“[Advocates of organisational culture] take it for granted that the objectives of the organization can be engineered to become consensual. Since every employee is assumed to share these objectives, and to benefit from their realization, there can be no moral objection to corporate cultural demands.”
However, such thinking is morally ambiguous:
“Instead of contributing to the development of a societal culture in which individuals learn to appreciate, and struggle with, the problematical experience and significance of indeterminacy, [organisational] culturism promotes what is, in effect, a totalitarian remedy for this existential problem. [Organisational] culturism directly exploits the feelings of insecurity and ‘irrationalism’ that are intensified by the capitalist process of commodification [of skills and labour].”
Employees tend to toe the corporate culture line because of the security it appears to offer. However, such buy-in is largely in letter, not spirit: although you might be able to control what people do, and may even get them to pledge allegiance to “organizational values,” you cannot control what they think. This is the point I was trying to get across to the executive.
I left the organization three years later, surprised that I lasted that long.
–x–
Perceptions of change depend on where one sits in the organizational hierarchy.
Many years ago, I was part of a project team that was working on replacing a venerable Lotus Notes–based system with a newer customer relationship management (CRM) product. I was tasked with integrating data from the CRM with other syndicated and publicly available data sets. The requirements were complex, but the system design evolved through continual, often animated discussions between the development team and key business stakeholders in an environment characterized by openness and trust.
The system was delivered on schedule, with minimal rework required.
Five years later, I was invited to participate in a regional project at the same company. The objective, which was set by the corporate IT office located in Europe, was to build a data warehouse for subsidiaries across Asia. Corporate’s rationale for the project was quite reasonable. The data landscape across Asia was messy, with each subsidiary taking a bespoke approach to data management in order to address their local reporting needs. From corporate’s perspective, this was a situation crying out for standardization. On the other hand, the subsidiaries were happy with their existing systems. They perceived the push for standardization as a corporate power play that would result in a loss of local autonomy over data.
To top it all, there were cultural differences around how such conflicts should be resolved.
Predictably, the discussions aimed at reaching a consensus devolved into heated Skype exchanges between stakeholders, forcing regional IT to step in and call a meeting to resolve the issue.
The story of how we resolved differences between corporate and local perspectives is documented in this article and this paper so I won’t reproduce it here. The point I wish to make is that the larger the change, the greater the effort required to align perceptions. Moreover, success depends entirely on developing trust-based relationships between warring stakeholder groups. This involves surfacing key points of contention and developing consensus decisions about them in a way that is acceptable to all parties. This is a matter of communication, not culture.
–x–
That said, I don’t like the term “communication” much. It glosses over details of what one must do to resolve differences, and the details matter because they are not obvious.
The anthropologist and polymath, Gregory Bateson once noted that “what [we lack] is a theory of action within large complex systems, where the active agent is himself a part and a product of the system.”
In the very next line to the one quoted above, Bateson offered a hint as to where an answer might lie. He noted that Kant’s categorical imperative – “act so to treat humanity, whether in your own person or in another, always as an end and never as only a means – might provide a starting point for such a theory.”
He then went on to say something truly intriguing: “It seems also that good teachers and therapists avoid all direct attempts to influence the action of others and, instead, try to provide the settings or contexts in which some (usually imperfectly specified) change may occur.”
This line resonated deeply when I read it first because it spelt out something that I had learnt through experience but had not found the words to articulate: change is best achieved by framing (or creating) a context within which individuals will see things differently and change of their own accord.
–x–
“I can’t handle failure,” she said. “I’ve always been at the top of my class.”
She was being unduly hard on herself. With little programming experience or background in math, machine learning was always going to be hard going. “Put that aside for now,” I replied. “Just focus on understanding and working your way through it, one step at a time. In four weeks, you’ll see the difference.”
“OK,” she said, “I’ll try.”
She did not sound convinced but to her credit, that’s exactly what she did. Two months later she completed the course with a distinction.
“You did it!” I said when I met her a few weeks after the grades were announced.
“I did,” she grinned. “Do you want to know what made the difference?”
Yes, I nodded.
“Thanks to your advice, I stopped treating it like a game I had to win,” she said, “and that took the pressure right off. I then started to enjoy learning.”
–x–
The student reframed her thinking in a way that changed her perceptions of the task at hand. Instead of treating it as an obstacle or race, she began to view it as an opportunity to learn. Doing so enabled her to meet the academic requirements of the university. Paradoxically, she passed the course with ease when she stopped obsessing about doing well and focused on learning instead. This echoes Bateson’s advice about changing a system from within and is an example of what John Kay calls obliquity: the idea that certain goals are best achieved indirectly.
You do not get people to change their perceptions by telling them to change. Instead, you reframe the situation in a way that enables them to see it in a different light. They might then choose to change of their own accord.
As a change agent, isn’t that what you really wish for?
–x–
The ethical dimension of complex decision making – a metalogue
Salviati: Hello Simplicio, it is good to see you again, my friend. What are you up to these days?
Simplicio: Good to see you too, Salviati. I have been doing a class on decision making as part of my MBA degree. It is nice to go over something one already knows well…and even nicer that I was able to convince my employer to pay for the course.
Saliviati: Well done! What is the most important thing you have learnt so far?
Simplicio: Let me see…um, I think it is that decisions should be based on hard facts and evidence.
Salviati: Hmm. It is true that most decision-making approaches will tell you to focus on facts and evidence – that is, what you know or can find out about the problem. However, it is often difficult to find hard facts and evidence, particularly in situations where facts are scarce or contested. In such situations, you have no choice but to pay attention to what you don’t know, the uncertainties.
Simplicio: That does not make sense. How can you pay attention to something you don’t know?
Salviati: Let me give you an example. You have done projects before, haven’t you?
Simplicio: Of course, you know from our earlier conversation that I’m a project manager by profession.
Salviati: OK, so what are the key variables in a project?
Simplicio: Time and cost, two apexes of the iron triangle.
Salviati: That’s right. Whatever the project might be, you know that time and cost are key variables. However, you do not know their values upfront. Your job as a project manager, is to come up with good estimates for these. Is that right?
Simplicio: Uh huh.
Salviati: OK, so you need to understand this uncertainty and to do so you must pay attention to it. The interesting thing about uncertainty associated with time and cost is that it is quantifiable. That is, you can develop numerical estimates for these variables using a range of techniques like, say, Monte Carlo simulation. The point I want to make is that regardless of the technique used, quantifying uncertainty involving known variables is a rational and logical process. Would you agree?
Simplicio: Yes, that makes sense.
Salviati: Now consider another problem, that of formulating a business strategy. What are the key variables in this case?
Simplicio: Hmmm…that’s a difficult one. It depends on several factors, the financial position of the organization, market share, the environment, business forecasts…oh, so many things.
Salviati: What information would you need in order to figure out which of these factors is important?
Simplicio: Oh, that’s impossible to tell without knowing more about the situation. There are so many things that could be important. You need to know a lot more about the business and its operating context before you can figure that out.
Salviati: Yes, that’s true, and I should also point out that no amount of data, number crunching or logical analysis is going to get you anywhere until you figure out what is important. Would you agree?
Simplicio: Yes.
Salviati: So, let me ask you: what do people in your organization do when they develop their business strategy?
Simplicio: Ah, they ask the experts of course – they engage Big 4 consultancies.
Salviati: Right…who better than a rank outsider to tell you what to do? At an inflated billing rate too! Surely there is a better way.
Simplicio: Like what?
Salviati: I’ll get to that in a bit, but I first want to make another point. A few minutes ago, I said that dealing with project estimation is essentially a rational and logical process. Let me ask you now: what kind of process do you think strategy formulation is?
Simplicio: What do you mean?
Salviati: Well, it isn’t logical…but it obviously isn’t arbitrary either. So, what is it?
Simplicio: I’m not sure I understand what you are getting at.
Salviati: This is a difficult question so let me approach it in another way. We agreed that the difficult part in strategy formulation is to figure out what is important, right?
[Simplicio nods]
Salviati: So, let me ask you: important to whom?
Simplicio: to management, of course!
Salviati: Do employees not matter?
Simplicio: They do…but their job is to do as they are told.
Salviati: Really? You think it as Lord Tennyson noted: “theirs not to reason why, theirs but to do and die.”
Simplicio: That is over the top, Salviati. The situation of an employee in a modern-day organization is not comparable to the poor soldiers in the Charge of the Light Brigade. Nobody dies.
Salviati: May be not, but I think the analogy is justified. There are so many cases of ill-fated strategies that could have, should have, been questioned before implementation, but weren’t. The consequences for employees, though admittedly not fatal, are disastrous…and the point is, employees are rarely given a voice in the decision. It is akin to the Charge of the Light Brigade.
Simplicio: OK, maybe it is, but what is your point?
Salviati: Strategy development and implementation ought to be treated as ethical matters rather than a logical ones.
Simplicio: Yes, I suppose they are. But that begs the question: how does one develop a strategy in an ethical manner?
Salviati: That, my friend, is the key question and it is a difficult one. The difficulty arises from the fact that ethics is hard to talk about meaningfully. Indeed, the philosopher Ludwig Wittgenstein went so far as to state that ethics cannot be articulated. His point is that the term “ethics” is meaningful only in the context of actions, not words. (Editor’s note: see this lecture by Heinz von Foerster for more on Wittgenstein’s take on ethics)
Simplicio: So how does one act ethically in this context?
Salviati: To answer that question, I will turn to Heinz von Foerster’s ethical imperative: act always to increase choices. (Editor’s note: see this lecture for more on von Foerster’s ethical imperative)
Simplicio: Umm…please explain.
Salviati: It is simple: if you do things that increase everyone’s choices then you are behaving ethically.
Simplicio: OK…but how do you “increase everyone’s choices” in practice?
Salviati: By involving them in the decision of course, and there are ways to do that. However, let me be clear, the aim is not to make a decision that satisfies everyone. That is impossible. It is to get as many different perspectives on the problem before making a decision. If you think about it, this is the only way to ensure that you do not miss important factors that could cause your decision to fall apart later.
Simplicio: That sounds idealistic and impractical.
Salviati: It might be idealistic, but it is not impractical. The basic idea is to make the different perspectives on the problem explicit. This can be done by eliciting the preferred options of the different stakeholder groups and documenting arguments for and against them. There is a visual notation called IBIS (Issue Based Information System) that facilitates this. With IBIS, we can visualize the informal logic of conversation using three types of nodes: questions (or issues), which capture the problem being discussed; ideas, which are options offered by the different stakeholders; and arguments for and against those options (pros and cons). By making the different viewpoints and the arguments explicit, you set the stage for making an ethical decision. Of course, one must also have in place the conditions that allow for open dialogue, and there are ways to do that as well.
Simplicio: So, the choices are matters of opinion, not fact? That does not sound right.
Salviati: Of course not. If someone makes a claim that needs to be validated or is factually incorrect, it can be challenged by others, even after the debate.
Simplicio: Ah, I see. This is interesting, I’d love to see how it works.
Salviati: I’ll send you some books, papers and articles on IBIS (Editor’s note: here are some articles and a couple of books.).
Simplicio: But I still don’t see how this makes the decision ethical.
Salviati: If you think about it, ethics is about doing what is good. The problem is if you try to define what is good and what is not good, you will tie yourself up in knots. It is impossible to come up with a meaningful universal definition of “goodness.” Wittgenstein was right when he claimed that it is impossible to talk about ethics. If one cannot speak about ethics meaningfully, the only possibility is to do it… and that is what von Foerster’s dictum is about. It tells us that ethical action is about doing things that increase choices for everyone. By eliciting multiple perspectives, you are increasing choices for the group. If the environment is one in which open dialogue can occur, then the choices can be freely debated by all and a decision reached. Even if the final decision does not make everyone happy – which it won’t, of course – everyone will agree that the process followed was inherently ethical.
Simplicio: OK, I think I see now. Since complex problems are multifaceted, one has to elicit diverse viewpoints on the problem to ensure one has not missed something important…and by doing so, one is also acting ethically.
Salviati: That’s exactly right! Incidentally, such complex, multifaceted problems are often called wicked problems. Much of the literature on wicked problems focuses on the surfacing and debating diverse perspectives, but very few writers (if any) comment on the inherently ethical nature of this process.
Simplicio: This is fascinating Salviati, thank you for broadening my perspective on complex decisions.
Salviati: My pleasure…but you should keep in mind that the process discussed will ensure that you surface and debate options comprehensively. The decision itself is yet to be made.
Simplicio: Oh! So, how does one make the decision.
Salviati: Unfortunately, there is no formula for that Simplicio. As you will appreciate, this is not simply a matter of picking the best option because different stakeholder groups may have different opinions on which one is best.
Simplicio: Hmmm, so what does the decision maker do if the group cannot settle on an option?
Salviati: Well then, the decision maker must make the call.
Simplicio: On what basis?
Salviati: I think I have already answered that. He must choose so as to maximise the number of future choices for all.
Simplicio: Hmm, we have already gone through that…
Salviati: There is no algorithm I can give you for this, if there were it would be a calculation not a decision – a matter of logic rather than ethics. All I can say is that, you, the decision maker must decide how you must act…and that should be in a way that increases choices for the greatest number of stakeholders. It may be further discussion or something else, it depends on the specifics of the situation. Regardless, it is a call you must make…and the choice you make says more about you anything else.
Simplicio: That is an unsatisfying answer.
Salviati: I’m sorry, but its as simple as that…and that is what makes it so hard.
–x–
Notes
A metalogue is a real or imaginary conversation whose structure resembles the topic being discussed. This piece is inspired by Gregory Bateson’s metalogues in Part 1 of his book, Steps To an Ecology of Mind.
The characters in this metalogue are borrowed from Galileo’s Dialogue Concerning The Two Chief World Systems in which the character Salviati is a proponent of the Copernican “heresy” that the Earth is not at the centre of the universe whereas Simplicio favours the Geocentric view proposed by the Greek philosopher Ptolemy.
From ambiguity to action – a paper preview
The powerful documentary The Social Dilemma highlights the polarizing effect of social media, and how it hinders our collective ability to address problems that impact communities, societies and even nations. Towards the end of the documentary, the technology ethicist, Tristan Harris, makes the following statement:
“If we don’t agree on what is true or that there’s such a thing as truth, we’re toast. This is the problem beneath all other problems because if we can’t agree on what is true, then we can’t navigate out of any of our problems.”
The central point the documentary makes is that the strategies social media platforms use to enhance engagement also tend to encourage the polarization of perspectives. A consequence is that people on two sides of a contentious issue become less likely to find common ground and build a shared understanding of a complex problem.
A similar dynamic plays out in organisations, albeit on a smaller and less consequential scale. For example, two departments – say, sales and marketing – may have completely different perspectives on why sales are falling. Since their perspectives are different, the mitigating actions they advocate may be completely different, even contradictory. In a classic paper, published half a century ago, Horst Rittel and Melvin Webber coined the term wicked problem to describe such ambiguous dilemmas.
In contrast, problems such as choosing the cheapest product from a range of options are unambiguous because the decision criteria are clear. Such problems are sometimes referred to as tame problems. As an aside, it should be noted that organisations often tend to treat wicked problems as tame, with less-than-optimal consequences down the line. For example, choosing the cheapest product might lead to larger long-term costs due to increased maintenance, repair and replacement costs.
The problem with wicked problems is that they cannot be solved using rational approaches to decision making. The reason is that rational approaches assume that a) the decision options can be unambiguously determined upfront, and b) that they can be objectively rated. This implicitly assumes that all those who are impacted by the decision will agree on the options and the rating criteria. Anyone who has been involved in making a contentious decision will know that these are poor assumptions. Consider, for example, management and employee perspectives on an organizational restructuring.
In a book published in 2016, Paul Culmsee and I argued that the difference between tame and wicked problems lies in the nature of uncertainty associated with the two. In brief, tame problems are characterized by uncertainties that can be easily quantified (e.g., cost or time in projects) whereas wicked problems are characterized by uncertainties that are hard to quantify (e.g., the uncertainties associated with a business strategy). One can think of these as lying at the opposite ends of an ambiguity spectrum, as shown below:
It is important to note that most real-world problems have both quantifiable and unquantifiable uncertainties and the first thing that one needs to do when one is confronted with a decision making situation is to figure out, qualitatively, where the problem lies on the ambiguity spectrum:
The key insight is that problems that have quantifiable uncertainties can be tackled using rational decision making techniques whereas those with unquantifiable uncertainties cannot. Problems of the latter kind are wicked, and require a different approach – one that focuses on framing the problem collectively (i.e., involving all impacted stakeholders) prior to using rational decision making approaches to address it. This is the domain of sensemaking, which I like to think of as the art of extracting or framing a problem from a messy situation.
Sensemaking is something we all do instinctively when we encounter the unfamiliar – we try to make sense of the situation by framing it in familiar terms. However, in an unfamiliar situation, it is unlikely that a single perspective on a problem will be an appropriate one. What is needed in such situations is for people with different perspectives to debate their views openly and build a shared understanding of the problem that synthesizes the diverse viewpoints. This is sometimes called collective sensemaking.
Collective sensemaking is challenging because it involves exactly the kind of cooperation that Tristan Harris calls for in the quote at the start of this piece.
But when people hold conflicting views on a contentious topic, how can they ever hope to build common ground? It turns out there are ways to build common ground, and although they aren’t perfect (and require diplomacy and doggedness) they do work, at least in many situations if not always. A technique I use is dialogue mapping which I have described in several articles and a book co-written with Paul Culmsee.
Regardless of the technique used, the point I’m making is that when dealing with ambiguous problems one needs to use collective sensemaking to frame the problem before using rational decision making methods to solve it. When dealing with an ambiguous problem, the viability of a decision hinges on the ability of the decision maker to: a) help stakeholders distinguish facts from opinions, b) take necessary sensemaking actions to find common ground between holders of conflicting opinions, and c) build a base of shared understanding from which a commonly agreed set of “facts” emerge. These “facts” will not be absolute truths but contingent ones. This is often true even of so-called facts used in rational decision making: a cost quotation does not point to a true cost, rather it is an estimate that depends critically on the assumptions made in its calculation. Such decisions, therefore, cannot be framed based on facts alone but ought to be co-constructed with those affected by the decision. This approach is the basis of a course on decision making under uncertainty that I designed and have been teaching across two faculties at the University of Technology Sydney for the last five years.
In a paper, soon to be published in Management Decision, a leading journal on decision making in organisations, Natalia Nikolova and I describe the principles and pedagogy behind the course in detail. We also highlight the complementary nature of collective sensemaking and rational decision making, showing how the former helps in extracting (or framing) a problem from a situation while the latter solves the framed problem. We also make the point that decision makers in organisations tend to jump into “solutioning” without spending adequate time framing the problem appropriately.
Finally, it is worth pointing out that the hard sciences have long recognized complementarity to be an important feature of physical theories such as quantum mechanics. Indeed, the physicist Niels Bohr was so taken by this notion that he inscribed the following on his coat of arms: contraria sunt complementa (opposites are complementary). The integration of apparently incompatible elements into a single theory or model can lead to a more complete view of the world and hence, how to act in it. Summarizing the utility of our approach in a phrase: it can help decision makers learn how to move from ambiguity to action.
For copyright reasons, I cannot post the paper publicly. However, I’d be happy to share it with anyone interested in reading / commenting on it – just let me know via a comment below.
Note added on 13 May 2022:
The permalink to the published online version is: https://www.emerald.com/insight/content/doi/10.1108/MD-06-2021-0804/full/html
Eight to Late 