Six Emerging Priorities For Leading Through Complexity

Can you identify the drivers of complexity in your organization? Are you able to diagnose the level of uncertainty in your environment? Can you assess a given situation’s complexity and use a framework for choosing an appropriate course of action?

The ever-increasing complexity facing organizations demands that leaders improve performance outcomes for their organizations. This is especially true for those working in unforgiving social, political and regulatory environments, which are rich with complexity and where the scale of consequences can be catastrophic. In addition, cognitive biases interfere with accurate perception of a circumstance and prevent the person from attending to additional incoming data. Further, it is very hard for the person whose perceptions and judgements are compromised to see it until long after the fact.

Leading through complexity requires leaders to possess impeccable awareness of their behavior and of how others interpret it. As leaders, we need to create actions that allow our people to quickly diagnose their level of complexity and respond accordingly. The following six principles are emerging as priorities for leading in a complex world.

Mindset for Complexity

Leadership mindset is critical for organizations dealing with complexity. This mindset embraces the discovery of new phenomena for which there is not an immediate diagnosis or solution. Instead there is inquiry, observation, and openness to discovery. This includes a willingness not to rush to reach a conclusion, which often frustrates others who have only a classic management mindset.

Increased Tension

The mindset in many organizations is to avoid complexity by insisting on adopting a known solution, even when the solution does not apply. The rush to impose a solution reduces the tension of the unknown, but does not serve the organizations best interests. That is, the choice of a quick solution rather than understanding the drivers of complexity is a temporary “feel good” solution since it reduces the personal tension of “not knowing”. Reducing tension costs the organization the opportunity to see the drivers of complexity which is found in the tensions and has the critical information for breakthroughs in innovation and reduction of risks.

Learning Agility

Leaders guide organizations and teams in development of new capabilities for embracing and learning from complexity. These new capabilities begin with identifying the drivers of complexity, rather than immediately assuming a known solution. Much of what happens in business does not actually fit inside “order and knowing”. Instead, it occurs in the realms of uncertainty and the un-ordered, which requires leaders who are willing to embrace the existence of complexity. If a business person assumes order, they will be surprised by the fact that “things that never happened before happen all the time”, a concept discussed by Karl Weick concerning High Reliability Organizing, or HRO.

Probing for Weak Signals

Leaders diagnose the level of complexity and uncertainty which their organization is facing. There are response patterns which can be observed, provide valuable insights, and ultimately diagnosed. The diagnosing involves probing for weak signals which require leadership experiments to quickly amplify and exploit these signals. A probe provides valuable data and patterns on what is being learned. The disagreement among those investigating the patterns is important. The leader and team collaborate in keeping an open mind and not falling into the temptation to prematurely rush to an inaccurate conclusion. The patterns serve as evidence necessary to diagnosing the uncertainty and effectively see opportunities in the complexity. Dave Snowden (from which much of this thinking is derived) aptly describes the response pattern as probe the environment, sense what works and doesn’t, and respond intelligently. This process of conducting probes gives an intentional look at the signals which led to success. These probes also allow for dampening the signals which are not working.

Capability for Creating Emergent Practices

Emergent practices enable leaders in an organization to observe the drivers of complexity, to conduct probes and projects to better understand the realms of complexity, and then to invent a course of action. Emergent Practice allows for experimentation and organizational learning. It is also an excellent place for Breakthrough Projects. With an Emergent Practice, solution emerges that could not be fully known in advance.

Leading Through Cognitive Bias

Facility in equipping others in the organization to spot cognitive bias is an essential skill of leadership. Cognitive biases are the consequences of mental shortcuts which every person uses routinely throughout the day. These cognitive shortcuts allow us all to function and are helpful in dealing with mundane routines. Occasionally these mental and behavioral shortcuts misread the situation and begin a course of action based on the faulty perception. The clear majority of these misreads are harmless and can even be humorous. However, on occasion these misreads can be very serious for managers assessing strategic options and anyone operating in some potentially complex situations.

KingChapman equips leaders to guide their organizations in identifying the drivers of complexity. In dealing with complexity, leaders begin with probing to observe the response patterns. Data discovered from these probes is the first step in agile learning and developing an intelligent response. The agile learning is required to avoid slipping into preexisting explanations which do not apply. Then information and learning can emerge.

 

Do you want to learn more about the type of leadership it takes to guide your organization through complex and changing time? Download our whitepaper: ‘Transformation Change Leaders: The Biggest Missing Ingredient in Business Today’

In it learn:

  • What is driving the “gap” that exists in Boards of Directors and leadership teams
  • The 6 main components of transformation change leadership
  • What is causing the shortage of supply
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Leadership Development Should Focus On Experiments

This article was previously published in Harvard Business Review on April 12, 2016. It was co-authored by Ron Ashkenas, Partner Emeritus at Schaffer Consulting.

 

Leadership development represents a huge and growing investment for most organizations. Industry research, for example, shows that companies spent more than $24 billion on leadership and management training worldwide in 2013, an increase of 15% from 2012.

The question is whether companies will get a worthwhile return on this investment. In past years leadership development has always been treated as a discretionary expense or even a luxury, and therefore something that could be pared down or eliminated in hard economic times. Underlying this notion was the lack of tangible results that could be attributed to management training. Without real results, leadership development becomes at best a leap of faith, and at worst a waste of time and money.

A number of companies are starting to address this issue by reversing the traditional leadership development “equation,” which essentially posits that if you give leaders the right skills and experiences, they will change their behaviors and produce better results. Reversing this means that companies start at the end — with results. In other words, leadership development begins with a real business challenge that leaders need to solve, instead of with a hypothetical case study or simulation. In order to succeed, they have to act, reach outside of their comfort zone, and adapt their approach.

Over the past couple of years, we have collaborated with the leadership development team at Cargill, one of the world’s largest global agricultural processing and distribution companies, to apply these ideas in a program for high-potential managers called “Leading in a Complex World.” Here’s how it worked:

At the beginning of each program, participants identified a challenging and complex problem in their business or function (e.g., product pricing, operational efficiency, customer service, etc.). Participants were then assigned to meet with people on the front lines of the issue both inside and outside the company (innovators, “future‐seers,” provocateurs, and stakeholders whose voices aren’t normally heard) to open up their thinking about possible solutions.

After reflecting on this input, each manager was required to carry out at least one safe-to-fail experiment. The small-scale project would test a possible solution in a low-risk way, in 100 days or less, and without the pressure of having to be right. In other words, the main purpose was to quickly learn about what does or doesn’t work. For example, one participant focused on creating a new pricing scheme. Another tried generating operational efficiencies through a different supply chain control tower process. Someone else designed an experiment to get a plant operation down to zero accidents.

As the experiments were proceeding, each manager worked with another member of the cohort to get peer feedback. This helped ensure that the experiments had clear measures of success or failure.

Of the 75 participants, 80% completed their projects and produced tangible results and business insights. One experiment generated a 2.6% reduction in work orders, which equated to $342,000 over the course of three months. Using the continuous process improvement methods that were developed for the experiment, the manager is now working to reach a 30% reduction goal over a longer time frame.

Another experiment was about achieving some cost leverage by testing the viability of a strategic partnership with another organization. When the manager shared proprietary information with the potential partner, however, he discovered that starting with a full partnership was not the right way to go because the relationship lacked “mutual trust and transparency, which takes time.” As an alternative, the manager began to test other ways of collaborating, short of a full joint venture. He reported, “Through this learning about cooperation in partnerships, we are running several new projects in the fields of sourcing and coproduction.”

Participants also reported learning how to be more effective leaders in fast-changing environments. As one person noted in her after-action review, “By doing our experiment at one site instead of implementing at all 30 of them at once, it took the pressure off. We could see what the data said, and it was all right if it wasn’t perfect. Then we adjusted before moving on to other sites.”

Of course, Cargill is not the only company that has reconfigured leadership development programs to start with a business problem. One of us (Robert) is leading a Health Science Leadership Academy in the Texas Medical Center in which clinical and administrative health professionals are using business experiments to help build resiliency to improve health outcomes. In addition, Ascom, a Swiss-based global communications company, has incorporated “rapid results initiatives” into their high potential leadership program for several years, forcing participants to apply their learnings on business challenges given to them by C-suite sponsors.

What all of these programs have in common is the belief that by focusing on constant experimentation, leadership development can be a driver for strengthening organizational capability and business success.

If your company already subscribes to this approach, you can use a leadership development program both to become a better manager and to accelerate progress on one of your most critical business challenges. If you are participating in a leadership program that doesn’t require this kind of hands-on experimentation, try doing it on your own.

Pick a business challenge that’s already on your plate — perhaps how best to introduce a new product or how to insure the efficacy of a new safety procedure. Then think about how you can shape a shortterm, safe-to-fail experiment that uses some of what you’re learning in the program. For example, introduce the new product in one region or to one “friendly” customer first, get feedback, modify as needed, and then scale your approach. With the safety procedure, you could test it quickly in a controlled environment to make sure it works as expected before rolling out to a wider group. You’ll be amazed at how leadership lessons become more real when you test them on an actual challenge.

 

Leadership experiments can lead to breakthroughs in your organization. To learn how to plan breakthrough projects, download our white paper “7 Elements for Chartering a Breakthrough Project”.

In it you will learn:

  • what a ‘Breakthrough Project’ is and why it’s critical to organizational transformation
  • why creating a ‘charter’ is a critical step in the process
  • the critical roles that key people must play in the project to enhance success
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5 Essential Leadership Commitments in Communication

Leadership and communication are so intertwined that they could be thought of as synonymous. It is important to remember that in this case, the term communication is shaped more by what employees feel, hear and perceive, rather than what the leader says.

People in the organization observe the verbal and nonverbal communications from executives. They look for clues as to the authenticity of these executives, and whether they can be trusted as leaders. The people also look at the congruence between what leaders say and do. They look to determine if “the walk matches the talk”.

Here are 5 essential leadership commitments that must be made in communication to transform organizations:

1.) Develop High Integrity Capacity

The level of congruence between words and action is essential in establishing the credibility of the executives. Petrick and Quinn call this congruence “high integrity capacity” — a coherent unity of purpose and action in the face of moral complexity and conflicting values. Building the level of integrity capacity is crucial for action and communication in transformation, given that a transformation invariably includes challenges as well giving up the comport of old ways of doing things.

In The Leadership Challenge, Kouzes and Posner point out that this important congruence includes the relationship between the leader’s stated values and priorities for constituents and his/her own behavior. “If customer service is important, find time to spend with customers. If your message is that ‘we’re all in this together,’ then make certain your own actions reinforce this message.”

Too often I have seen the stated purpose and values be horribly at odds with the executive’s behavior. As an example, I was working at a paper mill in Louisiana that was in the midst of a very difficult market and was having major operational problems with a capital expansion. The COO of the company concluded that job cuts were required to lower costs, even though this facility was not particularly overstaffed. On the morning that these difficult actions were to occur, the COO came flying in on a very expensive private jet (the latest Gulfstream), delivered a speech about the importance of cutting costs, and then jumped on the plane and flew back out. Needless to say, the executive’s actions were highly inconsistent with the words. Until the point when credibility is established, leadership communication will be ignored by many people in the business. In the example just described, the executive’s presence and speech made things worse for the facility management, rather than better.

2.) Align Communication with Transformation

Accountability is demonstrated by leadership communication that is designed to promote the transformation. This transformative communication includes a clear, comprehensive description of the reasons for the transformation, what the transformation will accomplish for the business and what the impacts will be on employees and other stakeholders. Leadership communication is not a one-time thing. Nor is it putting a video on the employee’s web sites.

Communicating with others about the transformation is a prime means of establishing and sustaining accountability. Ultimately, communications matter when people know what is expected of them, how this change will affect them personally, how you are enabling them to be successful in managing the change, and how the transformation will benefit the business and employees as a group.

3.) Learn to Acknowledge

Acknowledgement is a key element in effective communication and accountability. Yet a conversation for acknowledgement is often hard for people in business. We can usually describe all of the defects and limitations. Even in the face of a big accomplishment, we are prone to look at all the things that could have been done better. As an executive leader of transformation, you want to be aware of this tendency to focus on the problems and what is wrong.

Leadership Communication and accountability promotes acknowledgment, candor, forthrightness and honesty. All of these are attributes of effective leadership communication. Leadership accountability is essential in building and sustaining a climate of trust in leaders. Leadership inspires via communication. Communication is both action and word. As an example, acting with accountability is a strong communication. The opposite is valid as well, that is acting with a lack of accountability is a strong communication.

4.) Promote Ownership

A company with thriving accountability promotes “ownership” by employees of their portion of the business. This means developing ownership of the problems and lack of results, of creating innovative solutions to address the problems and increase results. It means taking ownership of the initiatives, people and results. These are all the things that a leader wants to see in a business, and are examples of what is evident when a business is transforming.

5.) Establish Metrics and Accountability Structures

Accountability establishes metrics and ultimately the needed measure and controls. Through the accountability structures, the employees and the leaders can see what is and what isn’t on track. Through accountability structures, employees and leaders can make important observations:

  • Whether they’re on the right course
  • Whether they’ve got the right people, and people in the right places
  • Whether they’re achieving goals
  • What is needed to institute change and target new results

Accountability leads and promotes transformation. Communication by leaders is essential in transformation, and accountability is at the heart of empowering people to become engaged in performance improvements and transformation.

 

If you want to learn more about what characteristics and roles leadership plays in the success of any organization, download our whitepaper: ‘Successful Strategic Execution Begins With Leaders’.

In it, you will learn:

  • The two hallmarks of an effective leader
  • The most crucial value for leaders to possess
  • The greatest contribution a leader provides
  • The most valuable ‘tool’ for a leader to wield
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