All Posts in Organizational Effectiveness

|In: Cognitive Enterprise|Last Updated:

We’re waiting on the proofs for The Cognitive Enterprise (Bob Lewis and Scott Lee, Meghan-Kiffer Press). It should be available in a week or two. To whet your appetite, here are some excerpts from the Introduction:

People, process, technology.

When running a business we have to think in these terms, or so we’re told by those who tell us such things. We’ve said such things ourselves.

But while they say “people” first, most often these business experts actually put process in first place. Technology comes in second, playing an important supporting role.

People, when they finally make an appearance … mostly represent irritating contributors to organizational change resistance. Something that must be overcome.

It’s really PROCESS, Technology, people.

While dehumanizing, this perspective worked pretty well for the industrial age of business …

Organizations “designed by geniuses to be run by idiots” was pretty much the game plan for the industrial age. Instead of operating through practices that were as smart as the smartest practitioner, businesses operated according to processes designed with a focus on simplification and standardization. These aren’t bad things in themselves, but they’re unfortunate in how they encourage employees to disengage their brains when they enter the building.

Businesses built to this model — call it the “industrial model” — are anything but cognitive. They’re nothing like an entity that pays attention to the world around it, evaluates itself and its changing situation, and continually adapts …

Even companies that aren’t in the Industrial business of creating lots of identical copies of things have, to their detriment, adopted practices designed for companies that are, because that’s “best practice” — a phrase that should, in your loyal authors’ opinion, be taken out and shot …

For more and more businesses, the industrial perspective and the hidden assumptions it rests on are obsolete. A constellation of forces are making them an impediment to success …

Before we get to that, there’s one hidden assumption that has to go by the wayside immediately. It’s the assumption that businesses are just like people only bigger …

They aren’t. Nor are they merely the sum of the individual human beings who work in and for them, any more than you are merely the sum of your intestines, spleen, brain, and so on …

Human beings are more than their component parts. Businesses are, too. They’re an artificial life form, created by human beings but non-human in their anatomy, physiology, and behavior. Among the differences, two stand out:

  • Humans are presumptively moral. Businesses are demonstrably amoral. We rightly assume most of the people around us, most of the time, aren’t going to behave in ways that are excessively nasty … the systems set up to enforce [our laws] are scaled to the assumption that people who violate them are the exception.

Businesses, in contrast, have as the bedrock principle of their moral code their fiduciary responsibility to their shareholders …

  • Human beings think before making decisions. Businesses, in contrast, aren’t intrinsically cognitive entities …

The closest equivalents to human-style thinking businesses have are the governance mechanisms that in principle make some business decision-making independent of the foibles of the individual human beings involved.

But governance is often window-dressing, with actual decision-making the result of horse-trading among the human beings who are supposed to be acting in the corporation’s best interests. It’s also commonly slow and cumbersome, unsurprising given that the fundamental building block of most governance is the committee …

But enough of that … our goal isn’t to bore you to death. It’s to provide practical guidance on making an organization behave more like an intelligent, purposeful organism and less like a directionless ecosystem.

Consider the difference between an organism and an ecosystem and it will be clear. Organisms act as a whole. As entities they make decisions, whether they’re as simple as an amoeba or as complex as Homo sapiens.

Ecosystems are just as complex as organisms … more … but don’t act with purpose … any “decision” an ecosystem makes is the accidental direction set through the “invisible hand” of all the plants and critters that live in it.

Most large enterprises are more like ecosystems than organisms, hence the old phrase, “It’s a jungle out there” …

A cognitive enterprise is one that acts more like an organism — one where business decisions are about the success of the business in its environment.

The point and purpose of this book is … to make the business, if not truly cognitive in the sense of being an entity capable of human-style thinking, at least an entity that mimics it in rudimentary but useful ways.

That’s what this book is about: How the hidden assumptions that led to the wholesale dehumanization of large enterprises are less and less valid, what the new circumstances are that are supplanting them, and what to do about it all.

* * *

Sorry. I know book excerpts don’t make for the best reading. But my wife and I took a road trip this weekend and I didn’t have time to write a real column.

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|In: Career Management|Last Updated:

He was a screamer.

Every so often I run across one of these — someone who gets ahead by throwing public tantrums. Strangely, some companies do little or nothing to discourage this behavior. Why? On the rare occasion I’m in a position to ask, I’m told the screamer gets results or some such nonsense: Any results I’ve seen in these circumstances happen in spite of the outbursts, not because of them.

If you disagree, a question: Given a choice, would the best talent in your industry work in an environment like this? And the best talent always has a choice.

Screamers display their temper to intimidate. It’s a way to get their own way, which is, I strongly suspect, their definition of “good.”

And those on the receiving end don’t even have to be intimidated for the outbursts to be effective. They’re unpleasant, and most of us, most of the time, are willing to make concessions to avoid unpleasantness.

Anyway, screamers are merely the tip of the culture-of-fear iceberg. There was, for example, this response to a standard question I ask everyone I interview during the information-gathering phase of any organizational effectiveness assessment … always, by the way, with a promise of confidentiality:

Congratulations! You’re now in charge of the whole company. It’s just for one day, though, so you only get to make one change. My question: What would that one change be?

In most organizations the answers are about reducing the height and impact of organizational siloes, adding more staff because the workload exceeds current capacity, fixing a bespoke interface tangle … that sort of thing.

When I asked this question in a fear-driven enterprise, one respondent answered, “You’ll have to ask my manager. This is above my pay grade.” His answer should have been, “I’d get the company to buy me a spine.”

Then he complained to his manager about my having asked him such an inappropriate question. It created quite a ruckus.

There is, to be sure, more than one kind of culture of fear. Perhaps the most pernicious is the kind of fear that stomps out initiative. Dig into what drives this sort of culture and you’ll find the fear goes all the way to the top, with members of the executive suite more concerned about what might go wrong than about what might go right — who pay more attention to risk than to opportunity.

You have, for example, undoubtedly run across the phrase “analysis paralysis.” It’s unfortunately catchy, because it obscures what’s really going on. What’s paralyzing the organization aren’t the endless analyses. It’s what’s driving decision-makers to ask for them: Fear that their decision might not lead to wealth and glory and nothing but wealth and glory.

“So far we’ve asked how male customers who are 6′ 2″ or taller, between the ages of 21 and 40, and are in committed relationships will respond to this, but we haven’t looked at the impact of incipient male pattern baldness. Go back and run the numbers.”

Even worse, and even more prevalent, are those companies that make decisions based solely on measurable financial return on investment. They’re worse because they’ve carefully organized their priorities so as to avoid investing in competitive advantage: If every project has to pay off, right now, competitive advantage isn’t even a subject.

To illustrate the point: You’ve read about the Internet of Things (IoT). You conclude it’s real, and that it’s important: If your company adds intelligence to its products they’ll be more attractive than what’s currently available in the marketplace. The same is true of your competitors, and whoever gets there first wins.

But the company can’t just add smarts to the products themselves. IoT requires significant enhancements to the IT infrastructure as a prerequisite. Now’s the time to invest.

What’s the ROI? None. Beefing up the infrastructure is foundational. It’s the smart products that will drive ROI.

And even there, competitors will also pursue IoT-driven opportunities. So the most likely outcome is that the actual business benefit will be remaining even with the marketplace.

Sometimes, expending enormous effort so as to maintain your position is a difficult and valuable achievement, even though there’s no way to measure the value, only the difficulty. But a fear-driven enterprise will never make the effort. The result: It will fall even further behind.

The financial squeeze that results will have only one possible and inevitable effect:

Future decisions will be driven by even more fear.

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