Business Success: Leveraging Chaos in Organizations Part II

Evolution at the Edge

It is important to acknowledge that the discomfort created by chaos is necessary for change to occur. It is equally important to safeguard against getting lost or frozen in the midst of the chaos. Leaders need to balance on the edge of chaos, dipping in and being comfortable there in order to move themselves and the organization to higher levels of evolution. This delicate balance includes inviting members of the organization to feel the need for change while not feeling overwhelmed by it. According to Coveney and Highfield in Frontiers of Complexity, “ Complex systems that can evolve will always be near the edge of chaos, poised for that creative step into emergent novelty that is the essence of the evolutionary process.”

edge_of_chaosThe edge of chaos is the best place to observe the patterns of order available, patterns that then may be applied to the current situation. Getting stuck in one particular state of order is not effective because, sooner or later, that state will become obsolete. It is crucial for leaders to remain open to new experiences that the environment contains and show a willingness to adapt and change based on the information received from the environment.

 

Emotional Distance

The ability to move gracefully in and out of change and the resulting chaos requires an ability to observe what is happening. Doing so involves being able to psychologically step back and assess what is occurring on multiple levels with detachment. If participants become emotionally involved, it becomes difficult for them to be objective.

Emotional distance allows participants to observe with an open mind, thereby enhancing the likelihood that they will hear other points of view and see what is occurring in a group. This is the reason why it is often suggested that facilitators not participate in the content of a discussion. They are then more able to see what is going on and make helpful interventions, dipping in when necessary to keep the group on course or help members deal with something they are avoiding.

What to Observe at the Edge

It is helpful to observe specific aspects of the group while maintaining emotional distance by asking:
• Are the goals clear?
• Are people listening to one another and communicating well?
• Are individuals involved and included?
• How are people feeling (what are their nonverbal expressions, what they are doing, how are they interacting)?

All of this information will help to identify clues regarding the health of the group, its relationships, and its interactions in the organization. If ineffective interactions are apparent, an intervention will help move the group to greater effectiveness. For example, if people are not listening, the facilitator can ask others to repeat what was just said. If goals are not clear, the facilitator can ask the group to clarify them. If the group is moving off task, the facilitator can ask if this is what the group should be doing. If someone looks angry or confused, the facilitator can ask him or her how they are doing. Another way of observing group effectiveness is to look for patterns in the organization.

Fractals

Discovered by Benoit Mandelbrot in the 1970s, fractals provide a guide for examining complexity and patterns. They are characterized by patterns that replicate to create the whole. In a fractal, each part is autonomous. However, the pattern of each part is embedded in every part of the whole. Some common examples of fractals are the lungs, circulatory systems, leaves, and feathers. Fractals contain a certain order that allows them to be decoded with a few rules. Complexity is the result of a given structure being repeated many times.

Fractals can be seen within the social life of an organization. Each member is autonomous while it is part of the greater whole. The organization is healthiest when members’ patterns are replicated throughout the whole through effective communication.

Leaders are fractals of others in the organization. Their behavior is often mirrored throughout the organization. If the leader is collaborative, communicates openly, and attempts to learn from past mistakes, this behavior will carry through to the members.

Norms as Fractals

Norms for behaving are patterns that can be observed in the organization. Much like a fractal, an organization is seen as connected if certain norms exist throughout it. Norms are the implicit or explicit rules that guide and determine what behaviors are acceptable within a group. Although often not explicit, these are the rules by which people work on a daily basis. They determine how a group handles conflict and stress, makes decisions, listens, generates ideas, and allows certain language to prevail. In any group, norms may be effective or ineffective.
An example of an organizational norm is the way a group deals with conflict. For example, some organizations suppress tension by pretending it is not there.

Nonverbal cues, such as frowns, crossed arms, and downward glances, are ignored while the group goes on to the next agenda item. This norm keeps the group from examining what is occurring, from sharing thoughts, feelings, and disagreements. These unresolved feelings and disagreements then go underground and sabotage the group later because they have not been resolved. Avoiding conflict cuts off important sources of information that could possibly improve the team, the product, and the way things are done.

Healthy norms are patterns in the organization that can:
• Encourage continuous open feedback, both negative and positive
• Encourage people to share thoughts and feelings
• Encourage individuals and groups to deal with conflict
• Allow learning from mistakes, without blame or judgment
• Create a flow of information throughout the organization
• Encourage participation and involvement in decisions

Each of these norms facilitates the emergence of a truly adaptable organization. All of these norms must be aligned with and support the desired values to ensure that those values permeate the organization. These values are in harmony with the principles that support living systems. As they become institutionalized, healthy norms will come to characterize the organization.

Seven Realities that Jeopardize Business Survival: Part II

In Information Revolution, Jim Davis, Gloria J. Miller, and Allan Russell discuss the

message-in-a-bottle “Seven Realities that Jeopardize Business Survival.” Each reality illuminates the need for new business models as well as styles of leadership. Here is Part II.

Business Reality 4: The Only Constant Is Permanent Volatility

This is a common theme but bears repeating: The company that is most agile and adaptable will gain and maintain a competitive advantage. Instead of just relying on past results to predict the future, companies need to tap into current trends through social networking, Web analysis, and employee feedback.

Business Reality 5: Globalization Helps and Hurts

Globalization presents many advantages, especially to small companies seeking a worldwide presence. Any company that is connected to the Web can strategically partner, outsource, or insource with relative ease. The downside is increased complexity when dealing with international languages, standards, and cultures. Strong communication skills are essential for navigating this terrain.

Business Reality 6: The Penalties of Not Knowing Are Harsher than Ever

In the new era of billion-dollar corporate scandals, personal accountability at the highest levels is not only prudent, it is now legally mandated. The Sarbanes-Oxley Act was designed to systematize ethical behavior. In addition to the need for strong, honest leadership, information systems to handle this complex business data are essential.

Business Reality 7: Information Is Not a By-Product of Business; It Is the Lifeblood of Business

The seventh business reality is a direct result of the first six. Due to shrinking business cycles, level playing fields, changing rules, volatility, globalization, and the cost of ignorance, information has become the lifeblood of many businesses. Today, accurate, accessible, actionable information is necessary to compete in the global economy. There are strong pressures to achieve more results while spending less time and money. Companies need up-to-the-minute information about their customers, suppliers, competitors, and markets.

These realities also point to the need for new business models as well as for visionary leadership. With the complexity of business today, decisioning throughout the entire organization has to operate like a well-oiled machine. The sections to come expand on optimal organizational structures as well as the core competencies, or success factors, necessary to operate at this level.

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Seven Realities that Jeopardize Business Survival: Part I

In Information Revolution, Jim Davis, Gloria J. Miller, and Allan Russell discuss the “Seven Realities that Jeopardize Business Survival.”[i] Each reality illuminates the need for new business models as well as styles of leadership. business_survival_life_ring

Business Reality 1: Business Cycles Are Shrinking

In today’s Web-enabled economy, speed within all parts of the business model is the great differentiator. To accommodate changing markets and consumer preferences, product development and testing that used to take years has been shrunk to months or even weeks. Today, the first to market often enjoys the competitive edge.

This shortened cycle challenges managers to make decisions with less time for consideration or analysis. As a result, they must depend on a combination of accurate, actionable information and intuition. And their decision must be in alignment with the overall strategy of the company.

Business Reality 2: You Can Only Squeeze So Much Juice Out of an Orange

The goal of improving operational efficiency drove a majority of the investment in the last decade. Initially the returns were high and provided a competitive advantage. However, now that enterprise resource planning (ERP) software is available, the field has been leveled. The next step is greater innovation and agility.

Business Reality 3: The Rules Have Changed; There Is No More “Business as Usual”

The days of following a typical path to business success are over. The same factors apply: profitability, customer satisfaction, stakeholder value, and competition. However, the path to success is very different and is fraught with new challenges:

  • Mergers and acquisitions have hindered agility and cohesiveness.
  • Productivity advancements have increased expectations from both customers and management.
  • Advancements in IT have overwhelmed the abilities of some companies to manage and leverage the knowledge.
  • The technologies that were introduced as the key to success often failed because the human issues were overlooked.

Stay Tuned for Part II and come back for more business intelligence and change management focused blogs by The OLIVIAGroup! Feel free to comment with questions, insights, or additions to this post. To receive alerts when the next blog is published, click on the RSS feed at the right of the page to subscribe.

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[i]             Jim Davis, Gloria J. Miller, Allan Russell, Information Revolution (Hoboken, NJ: John Wiley & Sons, 2006), xv.

Business Success: Morphing Current Businesses

Business Success: Morphing Current Businesses

Many traditional businesses are adapting their business models based on customer behavior. Amazon.com, the online bookseller, has grown into an Internet giant while many brick-and-mortar bookstores have closed. The publishing world has seen a change as authors enter the market independently using print-on-demand services.new-business-model

Many small businesses are now gaining access to world markets. And larger, more established retail businesses, especially those with a traditional catalog presence, are creating sophisticated shopping experiences for their customers on the Web.[i]

Why are Amazon.com, Lexus, and Disney partnering with lesser-known online companies to sell products? According to Wiredmagazine’s Ian Mount, the large companies are moving toward the manufacturing-as-a-service model to stay competitive. It has become necessary to compete with the small entrepreneurs who are producing and distributing products on demand. The production of products has become a commodity.  Because of the low cost of entry, anyone with a good idea can compete in this market.

New businesses that leverage this model are popping up everywhere, and many have global reach. Jeffrey Wegesin, a furniture designer, advertises his designs on the Web. Upon receiving an order, he contracts with an on-demand manufacturing service in New Zealand to create and ship each piece. He has no inventory or other up-front costs. His business is pure profit.

Designers of clothing, jewelry, robots, you name it! The model is inherently charming because of its efficiency and simplicity. Individual musicians and authors can market their goods without any up-front investment. With little more than a product idea and a good design, anyone can become an instapreneur.[ii]

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[i]             Bradley and Nolan, Capturing Value in the Network Era, 7-8

[ii]             Ian Mount, “Upside of the Downturn: 5. The Rise of the Instapreneur: Manufacture and Sell Anything in Minutes,” Wired (April 2008), 129

Where Business Intelligence Fits Into the Information Evolution Model

In Information Revolution: Using the Information Revolution Model to Grow Your Business, authors Jim Davis, Gloria Miller, and Allan Russell introduce the idea of the Information Evolution Model. As I discussed in my last blog, Modeling Innovation With BI, they propose four dimensions — infrastructure, process, people, and culture — as guides for evaluating your organization’s ability to leverage information in an effort to achieve your business goals. Here, I’ll take a deeper look at these four dimensions, framing them in context of the five-level Information Evolution Model.

The model’s five levels — operational, consolidation, integration, optimization, and innovation — are hierarchical and reflect aspects of maturity across the four dimensions. Generally, companies fluctuate within different levels across the four dimensions during this evolution.

Level 1: The operational enterprise

The most common type of organization at this level is the startup. However, many small businesses and large siloed businesses operate at this level as well. The following describes key Level 1 characteristics:

  • Level 1 knowledge process focuses on day-to-day tactics. This results in high variability in the access, analysis, and use of information.
  • Level 1 people tend to thrive in unstructured environments. The information technicians are often self-motivated and risk-takers. They tend to strive for differentiation and recognition, which might serve a company still operating at an entrepreneurial level. However, they resist change and loss of control, which may inhibit maturing to the next level.
  • Level 1 culture is well-suited for charismatic leaders and self-starters. Information management positions are structured to compete, allowing for the emergence of “information mavericks.” Job security is gained through individual control.

The manner in which Level 1 organizations share and use information is highly inconsistent. With the right talent, a business can thrive at this level up to a certain point or in a limited market. As it tries to grow, the individual focus can lead to inefficiencies, redundancies, and errors. Since little intention gets paid to coordinate silos, alignment does not play an important role. Skills in social interaction and teamwork are of little value.

Level 2: The consolidated enterprise

Organizations at this level have integrated information management within a silo or department. Typically, they’ve optimized knowledge processes to support operations within the functional areas.

  • Level 2 infrastructure features all data management hardware and software designed to optimize information and decision processes at a departmental level. Departmental discrepancies and duplication of effort are common pitfalls.
  • Level 2 knowledge process supports decision-making at the department level. This may result in inconsistencies and suboptimal results on an enterprise level.
  • Level 2 human capital and culture dimensions aren’t managed with an intention toward integration. Teamwork may be encouraged in small, homogenous areas, but strategic and interdepartmental collaborative efforts are challenged by the organization’s competitive structure. Communication also may be challenging without the benefit of a shared vision or enterprise-level goals.

Level 3: The integrated enterprise

An enterprise-wide approach to data management and decision-making characterizes organizations at this level. Integrated knowledge systems generate value by standardizing processes that promote coordinated marketing efforts. Resources are mobilized around market and customer relationships that optimize long-term value.

  • Level 3 infrastructure features a seamless, enterprisewide system of hardware, software, and networking that supports data reporting, analysis, and auditing while delivering a single version of the truth.
  • Level 3 knowledge process enables the company to optimize reporting and analysis to meet enterprise-wide goals and objectives. The focus shifts from a product to a customer or market focus with emphasis on relationships and long-term value. All information access and quality is aligned and standardized. Performance management is automated. This level of interdepartmental cooperation requires highly developed communication and collaboration skills.
  • Level 3 people balance departmental goals with those of the enterprise. Their holistic view and emotional intelligence allows them to contribute to and champion enterprise efforts.
  • Level 3 culture views business intelligence as a corporate asset and essential strategy. Training and organizational development focus on the importance of enterprise-wide access and intelligent use of information.

As the organization realizes gains of rapid decision-making, enhanced customer relationships, and shorter time-to-market, alignment becomes crucial for departments striving to coordinate actions and achieve enterprise goals. As the enterprise promotes cross-functional collaboration, competencies in the areas of communication and collaboration are increasingly important.

Level 4: The optimized enterprise

Adaptability is the distinguishing competency of organizations at this level. The ability for constant realignment with changing markets allows Level 4 organizations to maintain a competitive edge.

  • Level 4 infrastructure enhances Level 3 by linking internal business systems across the supply chain, from back-office functions through customer touch points. This enhances communications, data exchange, and connection to partners and customers across functional areas.
  • Level 4 knowledge process focuses on bringing the information systems to a higher level of quality, access, and relevance. All workflow patterns are modeled across the entire information value chain to optimize continuous measurement, decision-making, and real-time analytics leading to consistent and immediate customer response. Closed-loop feedback processes ensure continuous evaluation and improvement.
  • Level 4 people have many similarities to those in Level 1. They are independent, adaptable, innovative, and driven, and take calculated risks. However, their approach to the organization is more holistic. They, along with their peers, are focused on enterprise-level goals. So along with being innovative and adaptable, they must be highly skilled in the areas of communication and collaboration.
  • Level 4 culture empowers individuals across the organization to take on leadership roles. Along with access to rich quantitative information, they are given the autonomy to fine-tune the business model as needed by making incremental improvements. Doing this requires clear communication of the goals and vision from top management as well as the willingness and skills to collaborate and share ideas across departments. Change-readiness is an inherent part of the culture.

Level 5: The adaptive, innovating enterprise

Innovation is the distinguishing competency of organizations at this level. These organizations continuously seek ways to reinvent and transform their value propositions. This proactive model, based on BI and creative energy, lets organizations stay competitive continuously.

  • Level 5 infrastructure features an “intelligence architecture” capable of integrating and expanding quickly and seamlessly based on organizational needs. An advanced combination of analytic tools allows organizations to test and perfect new ideas in virtual environments, thus reducing time to market. Innovation is systematically fostered and supported through information access and sharing.
  • Level 5 knowledge process encourages innovation at the highest levels. Extensive analytics provide the ability to model the future while minimizing risk. As a way of stimulating new ideas, organizations encourage and facilitate collaboration on an enterprise-wide basis. The entire innovation process is documented, analyzed, and communicated throughout the organization.
  • Level 5 people are holistic thinkers. With a keen eye for the bottom line, they are also proactive, creative thinkers. They thrive on juggling many roles and activities. They actually enjoy change and get bored if the business becomes stagnant. They know their competitors are able to reach Level 4 with cutting-edge technology. But at Level 5, they can always outpace their competitors by continuing to innovate.
  • Level 5 culture embraces holistic thinking. All ideas, even the most absurd, are examined. Processes aim to facilitate creativity and support an intuitive flow of ideas. Constant change is the norm. To support innovation, inquiry, feedback, and collaboration are embedded in all aspects of the Information Evolution Model.

According to Davis, Miller, and Russell, no organization has truly reached Level 5. Some have pockets of Level 5 competencies, but most organizations find it difficult to thrive during constant change.

Conclusions

The skills needed for success in our high-tech, global, interconnected economy are moving from the technical to the human realm. Organizations are automating or outsourcing all linear processes. Enterprise BI based on accurate, accessible, useful data is a driving force behind this shift. Innovation as a core competency lies in an organization’s ability to align its infrastructure, processes, people, and culture to progress through the Information Evolution Model.

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Enterprise Business Intelligence: The Good, the Bad & the Ugly

The all-too-familiar promise of enterprise business intelligence is the ability to optimize decision-making at every level of the organization through a blend of systems and technologies that leverage highly useful, accessible, accurate data. In many industries, BI use is so pervasive that it is essential just to remain competitive! But many organizations never realize the full value simply because they are not agile enough to adapt to the new speed and complexity. leadership_techniques

The good: Great opportunities

Enterprise BI solutions offer a powerful competitive edge in today’s fast-paced, high-tech, global economy.

For years, organizations have been automating their reporting and online analytical processing capabilities. Recent trends are moving toward advanced analytics as the central focus of BI. This includes data mining, predictive analysis, complex SQL, natural language processing, statistics, and artificial intelligence. Advanced analytics provides a competitive advantage as it allows organizations to detect and model patterns and trends in all areas of their business, such as market shifts, supply chain economics, cost fluctuations, and more.

The bad: Typical challenges

Given the myriad of enterprise-BI solution options, just getting started can be challenging. In addition to the standard solutions that have been in use for many years, new Web 2.0 services, virtualization, social networking, and software-as-a-service options are available now, too. With so many choices and possible implications for the business, the decision-makers need to be thinking about how to optimize the balance between customer and shareholder value while considering all the financial and political implications.

The ugly: The real competitive advantage

Following an enterprise BI implementation, the expectation is that our day-to-day tasks will get simpler and more satisfying. After all, we have streamlined and automated many of the left-brain linear processes, freeing us to focus on expansion and innovation. But the reality is often very different. What many leaders don’t fully comprehend is the destabilizing effect that enterprise BI can have on an organization. Successful BI implementation requires a level of agility that is not inherent in most organizations.

Optimizing the benefits of BI in our continuously changing business climate requires the adaptability to manage the enormous complexity of redesigning processes, management structures, and measurement systems. In other words, to really understand and leverage the benefits of enterprise BI, we must understand the effect on all aspects of the organization — especially our culture and human capital. So what can we do?

An evaluation of interpersonal skills is a good first step. Why? Because in our new interconnected, interdependent organizations, team members must be able to connect and collaborate. This requires effective communication skills and a culture of trust. Skill-building in effective communication is a great place to start. Team-building and leadership development also deliver great value. Team-building develops a culture of trust. And with the current pace of change and need to adapt constantly, everyone is called on to be a leader at times.

Building adaptability through collaboration taps into the innate wisdom of the organization. The total benefit to the organization is often greater than the sum of the parts. This unleashes enormous energy for channeling into designing strategies for innovation, greater efficiency, and increased profits.

The finale

Whether you are just embarking on a BI solution, already have one in place, or are somewhere in between, it is worthwhile to assess and develop the interpersonal skills of everyone in your organization. The effectiveness of your BI solution will depend on the cohesiveness and agility of the CIO and his or her team. The failure of BI is typically blamed on the technology. But in truth, it is often a people issue.

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A Dynamic Organization Principle #10

Re-envision Leading: From Command and Control to (R)Evolutionary Influence


Motivation is the art of getting people to do what you want them to do because they  want to do it. —Dwight Eisenhower

In contrast to years of hierarchical management, leaders in adaptable organizations play a more subtle leadership role. They are the visionaries who envision a future that seems impossible today. They inspire, empower, and motivate others to make decisions. They manage the flow of information and communicate extensively. They take the broadest possible view and encourage collaborative problem solving.

The term (r)evolutionary influence is used to capture these qualities. The evolution of management_for_changecomplex systems is guided by probabilistic influence rather than deterministic control. When discontinuities arise, leaders must occasion a revolution by declaring a future others may not see as possible, and get alignment in the organization so that actions forward that future.[i]

The leadership model in the adaptable organization is more egalitarian. A manager might admit to not knowing an answer or even know the answer but still delegate that executive decision to someone on the front line. Rather than being the solver of all problems, the leader’s role to disseminate decision making by engaging the whole organization in the bidirectional sharing of information and knowledge.

Some powerful tactics facilitate and encourage evolutionary influence. Leaders must be willing to let go of control, take calculated risks, and envision the impossible for themselves and the organization. To maintain an environment of perpetual transformation, they must be willing to accept a higher risk of failure. This is achieved by treating everyone in the organization like a valued member of the team. True dialogue and information flow are necessary to facilitate communication. Conflict is managed effectively, leading to the generation of new ideas and energy.
Referring back to fractals, it is essential to see the system in its entirety. Each decision must be linked to the larger context. Some decisions may be suboptimal for a small group but still serve the larger good. The survival of the system depends on the quality of the relationships of each of its parts.

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[i]Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), , 124.

A Dynamic Organization Principle #8

Fluidify the Organizational Structure

The flow and accessibility of information is critical in complex organizations, especially those with global reach. The best structures are those that avoid rigidity. Community-based organizations are structured to optimize collaboration between horizontal units while requiring minimal input vertically. Their network structure facilitates the flow of information and task allocations diagonally, leading to maximum adaptability.management_of_change

The level of localization or decentralization depends on the conditions necessary for self-learning. The goal is to allow a structure to emerge that optimizes the ability to make rapid and relevant decisions. These structures will evolve over time as the organization grows and diversifies. Decision making is delegating to the front line with a mechanism for self-learning. Management does not set the goals and means. Rather, it sets the overall aim and allows each organizational unit to determine its own path through communication and collaborative decision making.

These tactics facilitate the development of a fluid structure with in a learning organization:

  • The creation of multilevel project teams supports a community-based structure. Senior management should delegate resources and objectives to the lowest possible level. Performance should be measured on both a team and an individual level.
  • Continually changing demands can lead to unclear reporting relationships. To facilitate learning, the organization should clearly define accountabilities while tolerating some lack of clarity. This becomes more natural as companies experience the value of community-based structures. Specific objectives and defined responsibilities lead the process while maximizing flexibility and learning.
  • Horizontal information flow and communication is very important. Within community-based organizations, information flows freely. Interconnectedness is facilitated by a plethora of communication devices. Therefore, the challenge is moving from information availability to discretion and relevance.

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Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000).

A Dynamic Organization Principle #7

Design Decision-Making Systems for Self-Organization

model_change_management_
An efficient and effective decision-making system is critical to survival in a complex, volatile economy. Organizations must develop processes that encourage self-organization. Doing so requires an open sharing of the vision, the free flow of information, and strong communication between all levels of management on down.

Decision making is one area where rigor and precision are beneficial in an otherwise fluid atmosphere. Respect for people’s time must be balanced with ensuring that everyone has a voice. Creative incentive packages, such as the ones discussed in Business Intelligence Success Factors regarding collaboration, enhance emergence of self-organization.

Complex organizations require a variety of decision-making styles. Some are designed for day-to-day operations while others focus on long-term issues. For example, formal decision making regarding important issues of management and predefined time periods, such as strategic planning, annual budgeting, and executive committee meetings, is typically well designed and structured. Formal, nonperiodic decision making designed to handle unexpected situations may also follow a set format. Formal decision making is used when a decision is needed with regard to a major restructuring, new directions, or investments and crisis management. Since formal decision making covers a variety of areas and are not planned very far in advance, the attendees may not be known ahead of time. These types of meetings are more common in complex organizations that aim to adapt quickly to market changes. Informal decision making can happen anywhere. It is important for leaders to be aware of the effect of limited input on their decisions. Managers who want to promote self-organizing, team-based, distributed decision making must recognize their power to influence through their conversational style and remind others that their opinion is just one of many that deserves consideration.

To foster self-organization, a company must guide its decision making to resemble that of an entrepreneurial enterprise. For example, reducing the presence of top management in the day-to-day operations is a good first step. Combined with an effective information exchange through every level of the company hierarchy, this shift ensures that the flow of information goes beyond the typical sharing of knowledge to include daily insights, ideas, and issues as they arise.

Self-organizing companies need teams that have a broad range of skills that represent a microcosm of the company. Such companies can adapt more quickly due to competent leadership and decision making at many levels.

Learning by doing serves large companies by reviving the entrepreneurial spirit. New challenges inspire people to connect with others to find solutions and increase learning. This leads to faster adaption of new ideas that energizes the workforce and unleashes innovation.
Complex organizations that share decision making and accountability must also share compensation. Many financial instruments to associate compensation with performance exist, such as employee stock purchase plans, cash bonuses, and stock options. One creative practice by Thermo Electron is the practice of spinouts. The company “hands over day-to-day control of newly formed subsidiaries and fistfuls of share options to the staff. The stock has returned 20% per year since the practice began.”[i]

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A Dynamic Organization Principle #6

Develop Ambitions Greater than Means

The limits you create will be real to you until you learn to step beyond them. Then, you  will look back at the reality you used to inhabit, wondering how you were able to stand  its narrow confines. —Paul Ferrini, Author and spiritual teacher

Companies looking to engage in perpetual transformational opportunities are most successful when they set their ambitions much higher than their means. As people participate in the vision, energy is released that inspires innovative ways for reaching the goal.

People who feel passionate about the vision step up to be leaders. Others wait until the goal seems more tenable before they engage. Abusiness_intelligence_success_ few resist and may add to the instability. However, if handled skillfully, the contrasting tensions can assist the transformation.

It is becoming increasingly apparent that companies that do not stretch their vision will be surpassed by the competition. These actions can assist companies to stretch their vision and prepare people for perpetual transformation:

  • Express a vision or strategic intent to members of the organization that leads to breakthrough thinking and action. By allowing the participants to embrace a grand vision, leaders naturally align themselves and move beyond what was once considered impossible.
  • Disperse control. The complexity of a major shift in vision requires top leadership to disperse control. By sharing the vision and empowering the participants, the idea takes on an energy of its own. The role of leadership is to continually share the vision, provide support, and celebrate accomplishments.
  • Stay focused and harness energy. In large, complex organizations, many transformative processes may be happening at the same time. The key to success is to stay focused and harness the energy created by the overall goal. A simple rallying cry, slogan, or watchword is helpful to thread the varying activities and maintain high spirits.
  • Discuss change and introduce points of inflection. Introducing a new vision when most members of an organization are satisfied with the status quo may prove to be futile. Most organizations are more susceptible to major shifts in focus during times of crisis. Starting a conversation about what might happen if the market shifts drastically can begin to prepare members for change. Introducing an artificial point of inflection is another option for stimulating receptivity.

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__________
[i] Christopher Laszlo and Jean-François Laugel, Large-Scale Organizational Change (Boston: Butterworth Heinemann, 2000), 79.