I was disappointed, but unsurprised, to hear news yesterday that yet another of my friends is having trouble finding work, either in terms of a permanent position or in terms of clients to sustain him in self-employment. After a good natter bemoaning the state of the world today, the shape of the economy and so on, we zeroed in on the real underlying issue:
Everyone in authority is afraid.
Considering that this is the ninth conversation of this sort since New Year’s Day 2010, a pattern is forming. (I would — had I a business need — hire any of the people I’ve talked to in a heartbeat: they would be competent, bring us strength, and happily share who they are and what they know in the course of it, making my organization better.)
That the book on my desk is The Hour of Decision exemplifies this: the author of that 1933 work, Oswald Spengler, was certain that his words would fall upon a people capable of judgement, decision and action. (Despite the description of this work on Amazon’s website, the book is not a call to Nazi racial theory: it is a call to all of Western Civilization to again become serious about their culture and disciplined in working toward the future, rather than simply voting themselves bread and circuses and good times, drifting into a future where others will ultimately topple us. The book was banned by the Nazis almost immediately as Spengler’s call for a return to Bismarckian values was as much an indictment of Hitler’s programme as of life in France, Britain and America.)
Today, decision and action are seldom found. Instead, organizations are rife with people who live in fear of suddenly being ejected from them. Such decisions as most of them take are negative in character: to “study this further”, or “to look at this again in the future”, and such action as is found is mostly in the form of sitting through (and calling) meetings to use up the hours, and spending inordinate amounts of time on email communiqués, being “seen” to “be busy”.
Lest you may, at this juncture, think me unduly harsh, I would refer you to David Bolchover’s The Living Dead: Switched Off, Zoned Out—The Shocking Truth about Office Life (2005), with its description of how organizations acquire lethargic staff, and how indecision increases with organizational size.
Abernäturlich, there are always exceptions. Organizations where individuals are primary contributors contra the management structure, as with partners in consulting and legal firms, university faculty, and the like (Charles Handy’s “Dionysian organizations”, from his Gods of Management), can be hellishly political places to be if you are in a supporting role (Managing Partner, the firm’s IT Head, or the Dean of a Faculty come to mind as exemplars), for each contributor has the power of “no”, and “yes” is negotiated. Those who are good at this process of winning support — I recall a retail situation where each outlet was individually owned and operated, the “brand” merely providing central buying, marketing and back-end services, where well over a thousand independent entrepreneurs had to be won over to a major technology investment and change — achieve great things. Few enough are: they are, however, decisive.
Handy’s “Zeusian” individuals — those who network heavily, constantly looking for deals to make — also are decisive and very much action oriented. Working the phones and the corridors, they ferret out information, take steps, initiate action. They are prepared for loss — and the inevitable apologies it entails! — and set this against a track record of wins. Found often driving their firm forward into new markets, working on innovations, or the like, these sort also can, and do, decide and act.
But neither Dionysians nor Zeusians rule in most organizations. Instead, much of the work is organized around the other two types: the “Apollonian”, or process-oriented order, and the “Athenian”, or project-oriented order.
We can see why this is so by looking at the Cynefin Framework created by Dave Snowden and carried into the market via the Cognitive Edge network. (Disclosure: I am an accredited Cognitive Edge practitioner.) Apollonian and Athenian work generally fall on the right hand side, both well-ordered realms (the simple and complicated domains). In both of these types of work hierarchy is in place, practices are well-codified, there is structure well-established. Compare this to the Zeusian and Dionysian, who tend to cope well with the left-hand side which is relatively unordered (the domains of the chaotic, and the complex). While innovations moving from the Chaotic through the Complex to become ordered often use Athenians to experiment alongside their Dionysian counterparts, and while the act of providing order often leans on the experience of Apollonians being led by a Zeus figure, the Athenians and Apollonians on their own tend to fall back on their expectations about order early in their thinking, whereas a Zeus or Dionysian is often comfortable with their expectation that order may be weak, creating a field of opportunity.
The great resistance being seen in practice to adopting a more ad hoc, bottom-up or middle-out leadership style — endemic to the realm of the complex and essential to closure in the realm of the complicated — is a result of an existential fear of a lack of order on the part of Athenian or Apollonian managers. The kind of future Jon Husband describes on his Wirearchy blog is stalled, certainly, because of excesses of simple order (financial delegations of authority that allow no action within one’s budget, human resources systems that insist on clear lines of command, and Sarbanes-Oxley- or Freedom of Information- or “Question in the House”-scarred senior executives demanding that all decisions be taken “at the top” are examples). But it is also stalled because Athenian and Apollonian individuals generally fear the release of order required for change and therefore (at best) resist taking action, or (at worst) deny that any change is needful (as Virginia Satir described in her change process model now transferred from family therapy to organizational change management).
Fifteen years ago, I could talk intelligibly with managers and executives about where and how all four of Handy’s types “fit into” their organizations — and relate it to the regional cultures found in their domains of operation (to answer the question “where best to put a function”). Many of those I spoke to were Zeusian-biased, leading Athenians and Apollonians with a deliberate placement of Dionysian contributors within the firm: in other words, they could take people, the bulk of whose work was ordered, and consciously develop change by shifting bits through the less ordered realms in a deliberate effort to deal with new circumstances.
Few of these are found now! In a 2006 research study I took part in, I discovered that the world Bolchover described now ruled: in almost all mid-sized (750+ employees) and large-scale organizations, the management cadre was now Apollonian or Athenian, reporting to similar styles as executives. Almost all their in-house Dionysians had been replaced by consultants or contractors whose work — and presence — could be quickly disowned.
The Zeusians, Dionysians and some portion of the Athenians (with a few temperamentally open Apollonians) now work for themselves, or in entrepreneurial organizations. As always, the failure rate is high: primarily, this is due to the fact that even the smallest organization — an employee base of one — still requires its fair share of all four work styles (there is no escaping the Apollonian nature of accountancy; even if the actual work is outsourced, the responsibility cannot be, and thus must be dealt with on its own terms) and few amongst us are so nimble as to be able to pay full engaged attention to all that needs doing, yet remain decisive and action-oriented in realms we have to consciously engage with. (Most start up organizations fail from a lack of order when it’s needed, although the results of that self-inflicted wound may take several years to become visible.)
Athenians live to a plan: it is the essence of project cultures. When slack existed, projects could be completed in the face of new events by utilizing the slack resources (which were more often cash than people). But the 2000s have not been a period of slack: the core Athenian tool to take a decision and act on it has generally been wrenched away, converting the Athenian manager into a pseudo-Apollonian managing a process (in this case, budgets and schedules without leeway or negotiating room). Desperate to retain any freedom of action, they give up resources to new hires or outsiders infrequently — and generally (especially when working for Apollonians at the top, as many with a Finance, Retailing or Manufacturing background now are) will not proceed without concurrence from above.
Meanwhile, the Apollonian managers tend to simply deny the need for change, since they are at the cutting edge of increasing order temperamentally and in their work. Without a decision that change is required, however, the consultant’s engagement or new hire’s employment simply doesn’t happen. (This is different from “replacing open positions”, where juniors can be engaged.)
The outcome of this is that the typical manager today reinforces their fears by worrying incessantly about their own perch on the greasy pole of management, since they are expected to anticipate every occurrence, achieve results regardless, and be an active participant in the undercutting of their own authority.
Meanwhile, the sad history of many former comrades who, resisting this long-term change, ultimately left to go elsewhere is something all of them know, if only from the occasional contact they have with them, and in a world where pensions evaporate and existing guarantees and benefits from seniority are not able to be easily (if at all) replicated, “protecting myself to retirement” nails the final board into place on being decisive.
This is how so many brilliant people around the world do so poorly in an economy where almost all change is sourced rather than done in house, where outside circumstances are forcing change into organizations whether they like it or not, and where technology appears to create ever-more opportunities. Meanwhile, this is why so many obviously inept roadblocks within organizations manage to hold — even expand — their positions, while the ones who actually accomplish something risk everything anytime they act.
As long as organizations value adherence above all, we shall continue to leave so much talent “on the shelf” and so many ideas latent. Too many will avoid notice and management precisely because they do not want to risk the greasy pole position. This deliberate undercutting of individual, group and organizational performance means that our society will continue to slip, regardless of the latest technology and its latent promises.
Great post!
Unfortunately, though, I don’t think it is just the people in authority that are afraid. I’m seeing signs that everyone is afraid these days.
In more business situations, I am seeing short tempers as the blanket of malaise has everyone that much closer to the edge. Even those that appear to have security (or as consultants, have gigs) know someone close that is having a tough go of it.
It stretches beyond the organizational boundaries as well. Organizations are opting to hoard what resources they have left (or jettison anything that is not core, often based on very weak business cases), and that is impacting those of us that arguably could go in and help them lengthen their runways.
Internationally, countries (particularly those that might border our own) continue to put up barriers that leave any apparent trade agreements in shambles.
There is a great value in adherence at many levels these days, particularly when it is interpreted as protecting what we have left.
At a time when we should be consciously building communities, leveraging complementary strengths from one another, boldly driving for excellence, we are instead reinforcing the lowest common denominator.
Not good. We need to see past the fear.
Jim
Hi, Jim, and thanks!
You are, of course, quite right, in that fear is rampant, period. How many people, for instance, fear not buying, no matter how much the stretch, a house because “the market’s moving out of reach” — and how many are listing their property for sale, because they fear the boom is right about to end? (We all know someone underwater, or perennially losing on purchase offers because they won’t keep jumping up, or feeling trapped in their neighbourhood, etc. We also all know people struggling in retirement, or struggling to get going — over 30 and still living with parents out of economic necessity.)
Sourcing is doing away with many of the former opportunities, and I think sourcing has gone to the point where many organizations are slicing off great hunks of “core” along with what they perceive to be dispensable. Certainly one BC organization that went the comprehensive outsourcing route a few years back has lost much of its capability even to specify what it wants from its sourcing partner, much less figure out what would make a difference. At the same time, the sourcing partner built a financial box for themselves that actually makes the deal better for them by doing less innovation rather than more. The net effect is that no one is winning. This is highly typical, alas, on both sides of the desk.
I’ve long felt that Canada would do better if we were to serve our six months’ notice of withdrawal from NAFTA. Homeland Security, Buy American and the like have made a mockery of the TN-1 provisions. Consultants are routinely turned back at the border merely for going south to deliver a sales pitch (which requires nothing other than entry as a B-1 visitor, i.e. no paperwork at all). We’re giving away too much access for too little. In the meantime, when was the last time you saw a Canadian company insist their American consultant be properly documented with an appropriate NAFTA class visa or “no work here; we’ll hire locally”. (Yes, Canada is less anal-retentive than the United States is, but employers could well insist for all of that.)
But your closing is the most important part: we are reinforcing the lowest common denominator. Yes — and every year we do that the level slips a little further, because doing that fails to render the minimal change needed just to “hold position”. Our fears are rendering us impotent, fully exposed to a crisis when it comes (and it will; they always do) — and the resulting effects will be made much worse and last much longer than they would have needed to.
I’ll have to reread to ensure comprehension but this Dionysian is but one of the multitude currently struggling, cut adrift by a sector that desperately needs innovation but collapsing under the weight of its own highly inefficient and costly bureaucracy.
Totally agree on the withdrawl from NAFTA . . . Beyond a manufacturing sector whose profits are totally reliant upon a weaker CDN dollar to sell into the US it does far greater harm than good, forcing US goods & services down our throats while protecting domestic US markets from competition. It’s a thoroughly unbalanced agreement that should never have been signed. I even go so far as to suggest that Mulroney should be prosecuted for treason for his role in NAFTA.
In addition to relocating across the country to pursue better opportunities this Dionysian is seriously considering re-framing his entire approach to business ~ stepping away from corporate consulting (not that there’s much to step away from these days) and moving towards small scale enterprise that provides direct value to consumers (e.g. fresh baked artisan bread).
Not that I haven’t said it before, Bob, but I will say it again: I hope you succeed.
In fact, artisan bakers are far more likely to pay attention and, later, pay your invoices, than are most of the technology start ups that many would say were your “natural” business grounds.
Who knows? Perhaps you’ll settle back into one of your old neighbourhoods, one that really needs a good bakery. Not to mention several other basic neighbourhood businesses that are better than the guys just down the street …
As for NAFTA: In 1988 I was against the original FTA, and voted appropriately. The GST coming in at the same time as the FTA took effect was a body-slam to the economy. As we dug out of that, along came NAFTA. NAFTA did work tolerably well for a while, but hasn’t for almost a decade now. “9/11” collapsed the basic presumption of business/labour exchange.
It is time to either (a) pass a Single North American Act as a deal between Canada and the USA (similar to the Single European Act of the pre-EU European Community, something that even Margaret Thatcher was able to support) and give all Canadians and Americans labour mobility with no more restrictions, or (b) kill NAFTA, since our softwood lumber, wheat, oil & gas, and manufacturing, are under constant attack in the Congress. At least by burying NAFTA what’s left of our energy would no longer be “committed” to the US market regardless of any needs we may have.
Finally, Canadian companies refused — outright refused — to recognize that what went down (the Canadian dollar) would ultimately come up. Having done nothing to become better in the 63¢ dollar days, they whinge unmercifully about the injustice of a 93¢ dollar. A better and clearer sign of managerial ineptitude is unlikely to be found until someone pulls the rocks off the waste at Industry Canada, in the regional economic development organizations, at the NRC, etc., these being the duplicitous side of the Canadian start up market.
David Lewis (NDP Leader in 1972) called them corporate welfare bums. True then, true now.
Its probably just human nature but you’re right, none of the manufacturing section seemed to be willing to treat the exchange rate as variable and structure their costs/margins accordingly. Selling goods primarily into the US also typifies as high degree of complacency (going after the low hanging fruit vs. the effort required to develop overseas markets).
Like people, business will adapt to the changing conditions but it may be painful for a while yet. Hopefully most will be able to get beyond the fear and raise the level of their game to establish long-term trade relationships with developing economies.
Given the way we and the Americans have cheerfully decimated, outsourced, etc. most of our productive enterprises in favour of McJobs, WalMart Greeting — or financial chicanery — or supporting services such as law, we are perilously close to North America qualifying for the traditional “developing country” criteria: national finances in distress, resource-based economy, must import everything.
I’d say we should start reversing that immediately!
Good post Bruce, I should post it as a cube grenade!
I’m just picturing this post as a cube grenade, Gerry. Talk about a “political statement” at work!
If you do, include the comments … the commenters have added much value to this stream.
Wow, so much insight. Where to begin?
Bruce, I think your update on Handy’s 4 mythology-inspired leadership styles is excellent. It makes me want to read “Gods of Management” (1995).
As it happens, I’m currently plowing through Handy’s earlier “Understanding Organizations” (1976) to get at his core thoughts on culture, because I think Org Culture is at once core to the problem and perhaps part of the solution. Yes, there is a comprehensive fear, as our cultures of control (driven by factories, risk aversion, and politics of scale) have compounded to reinforce the status quo of past success at all costs, breeding psychologies of inertia along with them. More size truly begets fewer decisions. Increased complexity only serves to introduce more variables and more decision-points, leading to still more failures.
We’ve lost cultures that promote learning and discovery. Urges to seek change and to adapt are held down or forgotten.
I view it as “holding innovation hostage”.
So that’s why I view cultural intervention as a place to start. More to come on that. After Schein & Handy, I’m seeking out Kotter’s thinking and the latest from the HSDI folks (Eoyang, Halladay, Nations). I definitely see adaptive models as sorely needed. CAS-centered learning teams. New paradigms for solving problems and organizing around them.
Regarding sourcing, I think the trends you have all outlined (locking into boxes, negotiating out innovation) are true enough, but again, I think a different kind of outsourcing deal can bring a compromise and better results. Smaller scope, shorter, more flexible terms, win-win for both sides w/ smaller margins. Less focus on slicing the shrinking cash pie, and more focus on strategic work allocation. Think ‘microsourcing’.
Regarding Zuesian problem solvers surfacing as independent consultants, the trend is important and real, and the evolution needs to continue. I see an increasing need to shrink large companies, in the context of workforce transformation. 1-man consulting operations can morph into a balanced 4-6 person firm, with requisite skills inside or outsourced (carefully, adaptively, per above).
Fundamentally? Beyond fear, I see the issue as scale and increasing complexity. So why not start to dial it back? Look for opportunities to transform. To shrink the too large, and expand (via networks) the too small.
Regarding NAFTA? I have absolutely no idea. I’m busy reading dusty OD books.
Maybe I’m all wet. But you guys are onto something with this thread. It resonates. There are 2-3 blog posts in your thoughts above that I’d been hoping to write, and you’ve written them. Thank you !! But now the needle swings around, and I need feedback. What about my musings? Am I, in fact, all wet? Tell me where I’m wrong, and I’ll adapt. I’m definitely still learning over here, and my culture research is still mid flight.
I hope to move the ball forward, while there’s still a game to be played.
Kudos for the tweet by Jon Husband that brought me to your post. Serendipity strikes again. Are you guys on Twitter? I’m @SourcePOV. Would love to connect and compare notes.
In case my tweet to do gets “lost in the flow”, you can find me at @BruceStewart, @SourcePOV.
One reason I made the comments I did about sourcing is that the economics of sourcing the routine, simple order domain processes mean that the sourcing partner is often locked into maintaining uneconomic skill sets and products to support these. As sourcing is generally capital-intensive at the time of deal acquisition, the profit is back-end loaded — precisely the point in the contract when you’d expect change to be taking place, yet the years of payback (risk management in the sourcing business’ corporate finance group will require payback within the duration of the contract most of the time) don’t allow development of much that’s substantial. That’s for deals where the sourcing partner has a free hand on the labour side: the kind of deals seen where employment minima must be maintained, or union locals carried over intact, are even less likely to support substantive change.
A problem for the growth of small firms is where procurement rules require minimum annual turnover and minimum years of operation. It’s not insuperable, but can close many doors. I have found rules like this in over 50% of mid-sized and larger organizations, public or private, in typical Canadian markets. They exist, incidentally, to stop managers from releasing headcount only to hire the person back as a contractor, a game played twenty years ago to manage budgets — and to stop favouritism in selecting vendors. (Another case where a hammer has been used to drive home a screw.)
I think the combination of organizational culture as it has evolved — I’d suggest you add Anne Wilson Schaef & Diane Fassel’s The Addictive Organization to your reading as a counterpoint to Handy’s fundamental optimism about the ability to change — and the tendency to “over-order” things to the point of chaotic breakdown implicit in regulations such as Sarbanes-Oxley and the rise of the “fully committed budget” reducing discretion together have locked the typical organization into a death embrace, between the fear of letting go a bit (something might go wrong) and the fear of not having enough control to meet regulations and legal requirements. What Schaef & Fassel brought to the table (for me) was the insight that organizations are also self-selecting: they bring in people that are much as they currently are. (Tom Langan, in a very different context, talks about the notion of the organization as a cosmion, or “little World”, in the 9th chapter of his Being and Time.)
Can organizations shrink to become right-sized? There’s little question in my mind but that the typical organization is too large (based on Coase’s principles, given the technologies we have today to lower transaction costs). Networks can help — Barnevik’s approach to managing ABB was an early, pre-networking attempt at that, but without demanding the model carry down another notch (or two) into the component parts. (Of course, Tyco, under its new leadership, has been combining business units to make larger components in an effort to “gain synergy”. It’s a constant struggle.) Then, too, most organizations do not expend enough energy or effort in making their networks or supplier arrangements work harmoniously and productively for them, thereby raising transactional friction or forgoing opportunity (but with someone now to blame that doesn’t “work here”, a politically safer route). Networks, too, are often more complex, especially in the hands of Apollonian managers who thrive in the functional hierarchy of the integrated firm.
Every large organization I’ve visited has had no shortage of people with vision, energy, drive, ideas (and, sometimes, the willingness to risk their position to make something happen). What we don’t have is an appreciation for the larger-scale risk management that we’re doing by allowing small risks to have a home in the firm. We don’t practice what we do understand: that complex adaptations are singular events, never to be repeated, and so we must live with uncertainty and the feeling of “being out of control” that comes with it. Until we start to reward solid performance with behaviours that create helpful change, instead of rewarding hitting all twenty bogies on a performance plan “in some way” (as is often what it judged at year end), we will not stop the ongoing erosion of our organizations, and the waste of human and national potential this creates.
Bruce –
Again, excellent insights. So many takeaways –
Agree on all your points about difficulties w/ downscaling sourcing. But I still think smaller, shorter-term deals with hinges have a chance. Thinner margins, thinner SLA’s & more risk .. but, worth modeling. Maybe sourcing needs to function like an SOA (web services, or ‘service-oriented architecture’) .. units self describe, services plug & play.
Thinking outside the box, a bit .. who knows.
Re: Schaef & Fassell in “Addictive Organization” I’ll take your advice & add to reading list, but I’m a optimist, which maybe explains why I’m liking Handy.
Networked orgs: more complex, yes, but in different, adaptable ways, and I think (hope) that will make them more manageable. I have not tapped into discussions by Beth Kanter & Valdis Krebs as yet, but have been very intrigued by Jon Husband’s Wirearchy thread, and posted there. Also tracking convo by Bas Reus in Europe, and some work by Karen Stephenson that’s surfaced.
I share your “talent trapped in large org” experiences.
SOX was a total nightmare. More ‘slack’ is critical in the system if the system & orgs are to survive.
You realize you’re talking me into a career change to OD?
Should I be running away !? 🙂
Actually, it may be too late. I’m thinking: “Complex Adaptive Organizations” – ?!
There is one sourcing firm I am aware of which sets a 19% net profit margin as its target. While this might seem to leave lots of room for your idea, the reality is that (on investigation) that number allows for a deal-lifetime average of exactly the firm’s current cost of capital plus 1%. The net effect is that there is no margin for a smaller deal to be struck at an affordable price, since the last two years would need a net profit margin in excess of 35% on a five year term to reach the same effect. This is why sourcing of the sort you describe is hard to find in the market.
Maybe the suppliers will figure out how to be more adaptive themselves, but I’m not holding my breath.
I did like the analogy to SOA, and I’d expect what’s likely to come about will be more like a loose, self-configuring network of SaaS components (not packages) to allow semi-repeatable actions on that network. Legal, procurement, etc. will have an extended fear festival, mind you! — on both sides of the transaction.
There’s lots of good people (you named a fair number of them) wrestling with this issue. In the meantime more ideas and field experiments are needed. It’s time to seriously test theory and build a body of knowledge based on many different kinds of organizations over time. Otherwise the elements in a business services oriented architecture will never be developed other than to replicate what we’re already doing (e.g. SalesForce.com doesn’t actually push the envelope on “how to sell differently” — mostly because the options aren’t clear enough to make developing for that a worthwhile venture for them).
I am not talking you into anything — but OD could use new synthesis and new blood in the field. (Not to mention a CEO willing to challenge the Sarbanes-Oxley Act as poorly constructed and incapable of honest adherence.)