Sunday 4 November 2018


In the previous chapter (Chapter 1: The Next Frontier), I stressed the urgency for organisations to become ‘fluid’ in order to survive, regardless of their industry. We need to redefine the principles of traditional organisational design, organisational behaviour, operational model and leadership. But how? Let us start with the most important component: people.

As humans, we are not very effective in cross-pollinating ideas across disciplines, particularly across the social sciences. It is a shame that we do not apply theoretical concepts across all human related matters. Many ‘modern’ concepts of organisational paradigms have been tested over centuries across different disciplines, yet we talk about them as if they were new ideas.

So what can we learn from other disciplines?

Over a century of organisational evolution has progressed us from Henry Ford's approach in 1909 - 'a customer can have a car painted any colour he wants as long as it’s black' - to market research analyst Kate Leggett’s famous quote in 2014: 'In the age of the customer, executives don't decide how customer-centric their companies are - customers do'.

However, that evolution had already occurred in the field of economics. The primary pillar of any economic philosophy is the conceptualisation of value. Celebrated economists Thomas Aquinas and Karl Marx proposed that the value of any product or service is determined by the labour required to produce it; a romantic supply-side biased concept that, when put at the centre of economic model, have contributed to the crash of many systems across the globe. The world of economics had to wait for Friedrich von Wieser's theory of value, determined by 'marginal utility' for the consumer, to have a subjective, customer-focused model to explain how things work in massive human-based ecosystems. In economics, this theoretical shift occurred between the 19th and 20th centuries. In organisational practice, we are only discovering its importance in the 21st century.

Economic models teach us several other things. For instance, the communist model’s biggest weakness - and root cause of massive collapses - is the arrogant belief that the heavy bureaucratic centre knows it all, can sense it all, and can react to all, with real-time precision. This couldn’t be farther from reality when we consider big, complex systems interacting with dynamic environments. Towards the libertarian end of the spectrum, we start to find systems that respond much better to complexity and dynamic environments.

In the same manner as communism, Taylor's scientific management and the idea that there is one ‘right’ way to do something, and the centre knows it, has been one of the most important pillars of the Industrial Age. This line of thinking also took us to the Waterfall Methodology for project management, assuming linearity, certainty, stable conditions and full knowledge at any stage of the process.

In new times characterised by exponentially and customer centricity, to continue applying the same approach would produce disappointing results. The shift has certainly started to happen, and Steve Jobs captured this perfectly in his famous quote often circulated on LinkedIn: “It doesn't make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” Agile methodologies came to the rescue with solutions involving collaborative effort of self-organised, cross-functional teams focused on customer needs. Once again, the emerging ideas about management approach have been thoroughly tested by economic systems already.

In 2012, Nassim Taleb coined the concept of ‘antifragility’ as the property of a system to increase capacity and strength as consequence of stress, shocks, attacks or failures. This concept is fundamentally different to resilience (the ability to recover from failure) or robustness (the ability to resist failure). One important characteristic of antifragile systems (or organisations, or organisms) it is that they depend on the fragility of the constitutive parts. Microtraumas, elimination of underperforming parts, and the Silicon Valley's ‘fail-fast’ approach are all mini-sacrifices for the antifragility of the system.

While appearing now as a new concept, we have understood antifragility in the biological sciences domain since Darwin. Evolutionary biology is perhaps the most antifragile system ever existed, through the infinite cycle of breeding, mutating and selecting. Borrowing from this theory, many authors and experts in the Artificial Intelligence domain speculate that we will reach the first 'Artificial General Intelligence' through evolutionary computing, not through deterministic algorithms.

We must understand that, if we remove our egos from the equation, quick mutations and reactions at the periphery can produce better results than by design from the centre. However, without proper attention this approach may lead to chaos. An antifragile system depends on two things: mutation of how we do things, and selection of the most successful ways of doing those things (this means stopping underperforming variations).

It is not good to have many ways of doing something, nor is it good to have one strict way of doing something. The delicate balance of mutating and selecting is critical. It is essential to have one set of values, one set of principles and one direction. But beyond that, it is necessary to apply 'organisational evolution'.

Looking to the future: Freeing the robots…

Looking at the past, it seems that organisational leaders always wanted to be computer programmers and rule over the robo-fleets. The problem was that in the last couple of centuries, computers and robots were not widely available, so they took the only available element to replace them: humans.

For the past two hundred years, productivity methodologies focused on turning humans into the best possible robots: doing tasks repeatedly, in exactly the same way, without declining performance, without thinking, and easily replaceable with another robot with the same position description. Quantity, consistent quality and controlled cost has been the focus of management theory and organisational design.

Our work environment has been perfect for robots, but not for humans. As Peter Drucker once said: "So much of what we call management consists in making it difficult for people to work."

Times have changed, and silicon-based robots are now available in both physical and software formats. They can undertake menial tasks and free the carbon-based (human) robots from centuries of slavish labour. In the age of technology, we must become more human than ever, despite the fact that, for so many, this is a terrifying concept.

Standardisation, repeatability, predictability, exchangeability are all characteristics of the hardware layer of organisations. Unfortunately, we humans have been part of that layer for too long. It is time to build that layer with proper hardware and on top of it, create new, powerful adaptive layers of purposeful autonomy, empathy, experimentation, creativity and responsible freedom.

The problem is that most management literature, as well as our education system, is geared towards managing robots, not people. In his 2009 book Weapons of Mass Instruction, Taylor Gatto explains that our traditional education system was copied from the 18th century Prussian model, designed to create docile factory workers (human robots), who were no more than programmable physical components. This is echoed by Sir Ken Robinson's excellent TED talks.

Something important is missing in organisations, where the focus on efficiency and predictability forces the robotisation of employees. Here, we need to look at another discipline that suggests a solution. In sports coaching we tend to see, properly applied, the concepts of: creating inspiring environments; a good balance between team playing and distinctive individualities; some prepared tactics but within them, freedom to operate on the field; and a strong and shared sense of purpose. Dynamic sports teams change and evolve, adapting to changes in their competitive environment to optimise their chances of winning. 

The major challenge of our age is to embrace and empower our humanity, to become the cognitive and empathic software layer of organisations. That is the key for growth, adaptability and antifragility. Alas, this is significantly easier to say than to do.

We have been robots for so long. Neither organisations nor individuals are well prepared for workers to be something else. We have a very long history of admiring strong leaders who ruled with forcefulness; and our corresponding quiet acceptance of the subordinate position was the natural order of things. Workers have needed to follow the instructions of the master programmer. Non-compliance would risk losing the job. And fear of loss does funny things to the decision making process. When we perceive a threat situation, blood goes away from the brain, in preparation for a ‘fight or flight’. “When the fear system of the brain is active, exploratory activity and risk-taking are turned off,” says Professor Gregory Berns, Director of the Centre of Neuropolicy at teh Emory University in Atlanta, USA. “Those that rule through rigid control are jeopardising innovation, staff-productivity levels and ultimately business performance”.

Dan Cable, Professor of Organisational Behaviour from the London Business School, has some compelling ideas for the removal of the fear system. He suggests enabling the 'Seeking System'; the part of our brain that craves exploration and learning and gives us hits of dopamine when we follow its urges.

The seeking system is activated by three things: encouraging people to: (a) play to their strengths, (b) experiment and learn, and (c) feel a sense of purpose.
It is essential, then, to build organisations with these three elements in mind. In that way, on top of an automated and precise robot layer, organisations will have a powerful, adaptable, unstoppable human layer. 

But how can we design the organisation, establish the foundational principles, and define the required leadership style, to leverage the concepts presented here?

Those are very good questions!

(To be continued ...)


Summary of Chapter 2:

  • Employees need to play a substantially different role - we need to leave the robo-work to the robots.
  • Moving decisions and solutions from the centre to the periphery, and having a mutating/selecting way of doing things, are key for organisational evolution.
  • We must remove the fear-system and enable the seeking system in organisations, leveraging individual strengths, risk-taking and experimentation, with a strong sense of purpose. 

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1 comment:

Deepesh said...

To change the DNA of a business, it requires transformation , one individual at a time, both, from bottom to top and from top to bottom. The transformation may be slow to start with, but there will be a tipping point after which , the transformation may be exponential.