Talent Management: Organizing to Meet Uncertainty


How do you “broadly speaking” organize to meet unexpected events such as those called Black Swan events by Nassem Taleb? An article the 2 February, 2011 Vancouver Sun  (page D5) titled ” Looking in the rear-view mirror no way to prepare for future risks”, by Juma Wood explores this question.

Wood raises a number of thoughts about what is happening (re. increasing uncertainty) and what are some reasonable responses. His comments are thought provoking and they helped me clarify some of my perspectives that I have touched on various times in this BLOG. This post will build off what Wood proposes and integrates them into my proposed TM framework.

Wood’s key observations:

  • Most contemporary organizations are built on  a mechanical concept of command and control.
  • The information age has increased and complicated our risk portfolios, globalizing pertains beyond the comfortable reach of command and control approaches.
  • Resilience in the 21st century means increasing (decreasing?) response times by building adaptability and dexterity into the organization’s fabric.
  • Need to take steps to decrease bureaucracy, transfer responsibility and decision making across the organization.
  • Means hiring people who can handle this responsibility
  • Means people will need skills to coherently synthesize various streams of information while learning to tolerate ambiguity.

One, gratuitous comment to get out of the way:

I suspect that our world is no less uncertain and complex than it was to those in any other age of humanity. People establish their institutions to deal with the perceived uncertainties in their lives the best they know how.

Does our perceived sense of uncertainty today require different fundamental regarding how we organize our social institutions? I would argue it depends on the organizations purpose (what aspect of uncertainty and risk is it charged with dealing with in our lives).

Examples:

  1. I find it hard to perceive how we would organize a chemical process system differently than we do now. These organizational forms are often quite “controlled” in operation and we would not have it any other way as they can become quite dangerous with any significant variance in operational norms.
  2. We see the military make significant changes to how it deals with perceived changes in warfare and combat situations (although it may seem “after the fact”). We see emergency response units have core reactive flexibility while maintaing coherent technical role clarity.
  3. We usually see in organizations that are viewed as very “organic” “non-mechanistic” (surgery operations, movie making) with high degrees of rigidity in parts of the organization – typically around key roles where clarity about responsibility is paramount.

As I reviewed Wood’s suggestions, the concern for me centred around the fundamental dilemma – “How do you organize around what you don’t know or foresee?”.

To organize means to achieve at least two outcomes: deal with a purpose/need; deal with it efficiently. By efficiency, I mean with a “minimum of fuss”. So this concept can extend to beyond working capital concerns.

It is the efficiency dimension that makes organizations structurally set (even rigid). Now the irony. In environments where there are high degrees of stress, uncertainty and risk – we need to minimize our energy outlays so we can deal with surprises. This means that some aspects of our lives need to be very ordered, predictable and consistent. I suggest that we achieve this:

  • In our “physical” sides of our lives with process like organizations;
  • In our “social” sides of our lives with social norms which can range from being extremely loose to being extremely ordered ;
  • In our “who we are as a person” sides of our lives with values, frames of references (FOR), etc. which can range from “soups to nuts” (sorry for the deliberate bad pun). These to can range from being very loose to very rigid. What I have observed, is during personal crisis, having clear, explicit even rigid like belief systems can be very important to personal survival.

So, I am left with appreciation, that rigid like organizational forms in our lives is not a predictor of failure under uncertainty.

But what if you wanted to design an organizational form that was capable of dealing with uncertainties in its typical operating environment (i.e., surprises happened frequently). What would the design principles be? I suggest the following attributes may be looked upon favourably:

  • Effectiveness is more important than any concept of efficiency (more important to get the job done than at what cost).
  • Concept of redundancy/reserves would be entrenched (important to be able to direct resources to surprises without creating internal chaos)
  • Role modularity to the extreme. Easily reassembled. Simple use modules vs. multiple use components (easily reconfigure to the new purpose/need).
  • Understand how to best see the likelihood of surprises. Means having a clarity around your FOR of how the world works and what the limits of that FOR are (know your competence/incompetence, know how to establish leading indicators).
  • Have robust healthy capacity to second guess what you believe and have chosen to do in the past (denial should be a river not a state of mindset)
  • Incorporate the skills to effectively  “re-theorize” (every organization is a physical embodiment of a theory on how best to operate – if you can’t see this you are in trouble).
  • Accept you will never be a single event/sport olympic athlete (specialization adds to your risk).
  • Organize so that you are comfortable with walking away (reduce likelihood of loss through over commitment).
  • Organize with at least three back doors (have an exit strategy).
  • Know the overall purpose is to survive as a person/group of people (understand the difference between bravery and martyrdom).

So although I have arrived at a different place than Juma Wood offered, I am where I am today because of his thoughts. Thank you.


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About 123stilllearning456

As a management consultant I am passionately interested in talent management and risk/uncertainty issues. In the area of talent management I propose that we seek strategies that look beyond the staffing/employee centric frames of reference. I have been frustrated at the "closing down on possibilities" by these more conventional staffing/employee centric approaches. I have been impressed where people have found systematic solutions to their talent management issues by going beyond the conventional approaches. In the area of risk and uncertainty, I am interested in making this topic relevant to more normal decision making situations. My conceptual foundation is to use the micro-economist's fixed/variable cost theme. I also think it is important to look at these issues for people through their emotional and psychological lens. As a premise I think risk and uncertainty only exist where there is a person who cares about possible events and its consequences. Hence, risk and uncertainty are social based concepts (no sentience, no risk and uncertainty). A major influence on my thinking in this area is Nassim Taleb of "Black Swan" fame. This BLOG provides me with an opportunity to express my thoughts on topics that interest me. As this is an online diary, content is more important to me than polish. I apologize if this distracts from readers' enjoyment and learning. Still I find this a useful way to live up to my namesake, learn more from others and hopefully provoke creative thoughts and ideas in others.
This entry was posted in Decison Making, Risk & Uncertainty, Talent Manangement. Bookmark the permalink.

3 Responses to Talent Management: Organizing to Meet Uncertainty

  1. Rick Knowlan says:

    I read Wood’s article in The Sun, too, and didn’t think his ideas covered the territory particularly well. Like you, I don’t think increased environmental uncertainty necessarily requires dismantling mechanistic features of organizations. After all, even very flexible and responsive organizations refine and standardize some business processes. The degree to which mechanistic processes are suitable depends more on the characteristics of the task being done than of the organization’s business environment.

    One example is the typical customer interface in large organizations with complex offerings. Telecom companies typically divide their organizations by customer type (mechanistic), then develop complex flow-charts to guide their customer service reps through the process of dealing with customer requests and complaints. But that doesn’t mean the customer service reps must deal with customers like automatons! The process can be refined and standardized, with flexibility and individual judgement added in the right places. I doubt that the best of these processes needs to change just because we face greater global risk and uncertainty.

    Although some may criticize telecom companies for what they see as slow response to a changing world, their failure to respond to developments isn’t because they’ve mechanized business processes. It’s more likely because they’ve retained mechanistic processes in some of the wrong places!

    Where flexibility is most needed is in conceptualizing and responding to change! This means organizations have to become better at processing new developments, weighing their strategic implications, deciding in a timely manner how to respond, and most emphatically, responding quickly and effectively once a decision has been reached.

    Building in organizational flexibility through redundancy, decreased specialization and modularity is a good way to increase an organization’s ability to respond in a timely manner to important unexpected changes. It also increases the speed with which an organization can change and implement its own chosen strategies – a critical factor in strategic success.

    • I appreciate you highlighted an aspect not covered in my post – that organizations can have parts highly controlled and other parts less so (or the need met some other way). I also think that we are not passive re. our environments. We/our organizations have the option of being first movers too, as well as learning to be highly responsive. This too I did not elaborate on in the post.

  2. Juma Wood says:

    Hi Mark,

    Thanks for the thoughtful input. And thanks Rick for the critical reflection.
    One caveat is that trying to discuss these ideas in under 500 words will inevitably leave glaring holes. Another thought I had while reading both these posts was how interpretation and assumptions collude to find disagreement where agreement is largely the case.

    That is to say, I agree with most of what both of you have written, and yet you both see yourselves as coming down on a different side than that of the article.

    I found no greater agreement than in Rick’s comment that ‘Where flexibility is most needed is in conceptualizing and responding to change!’ I think this was my implicit (maybe it should have been explicit?) point.

    At no time did I advocate for a whole-scale dismantling of current organizational structures. Indeed, I would be advocating for my own unemployment. Rather, Rick, you capture it quite well with the remainder of the paragraph:

    “This means organizations have to become better at processing new developments, weighing their strategic implications, deciding in a timely manner how to respond, and most emphatically, responding quickly and effectively once a decision has been reached.”

    I’m not sure how this happens only by conceptualizing a new response to change. In my experience, a change in concept takes shape in the physical environment and the culture and capacity of the people. Which is why I advocate reducing bureaucracy, not purging it outright (neither possible nor desirable). Improving these areas as you list them will not be possible without making changes in process, communication, responsibility, accountability and decision-making authority. And this will look like something in the physical environment, and I’m suggesting it will look less like the hierarchical structures we are familiar with. This does not in any way imply the abolition of said structures, but rather a reconception of how they are organized and how they function.

    What I didn’t write (again, space issues) is that the key is flexibility, and not flexibility as a constant state of flux (which you rightly point out drains energy), but rather being capable of a range of responses, and yes this includes a certain degree of ordered, predictable consistency.

    Again, this doesn’t come at the expense of the whole woolly mammoth, but we will need to trim some hair.

    The military is a great example. We don’t dismantle the whole of the military infrustructure because of an increase in asymmetrical warfare (fourth generation warfare). We do after all still confront conventional state actors. But strategies and tactics AND infrustructure have to evolve to meet the new challenges. The system has to be responsive to a wider range of circumstances. That, I think we can agree, is flexibility.

    Ultimately, there is nothing I heartily disagree with in your recommendations Mark, but my suggestion is that these capacities have to be drilled all the way down into the organization, and that is a developmental exercise leveraging people as the best response to an increase of unknown variables. That this requires reinforement via role clarity and the like is not in dispute.

    All this said, there is a host of ideas in here that gave me pause for thought and were not part of my consideration when writing, so thanks for that. It also occurred to me that had I known the both of you earlier, this piece may have been further refined, accurate and effective. That said, I stand by the basic premise and would be happy to continue discussing and teasing out distinctions.

    Best,

    Juma

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