Should my team structure be fixed or variable? Should my funding be fixed or variable? Should the plan reflect fixed expectations or variable possibilities?
The reality is, it’s neither one of those isolated notions, but rather both of them enabling organization’s performance in concert with each other.
On the one hand, enterprise reality contains inherent uncertainty and variability. External conditions change, internal factors evolve and, even more importantly, we are able to refine our understanding of those only over time. It is fundamentally irrational to attempt building organizational plans and structures that contain “all the answers” inside.
On the other hand, everything cannot be a moving part. In a sense, an organization cannot just sit and wait for the facts to unfold, it has to actively work to facilitate the desirable future outcomes. It cannot “design” the future in a conventional sense of the word – that’s not how complex adaptive systems operate – but it indeed can and should create the environment and enablement for moving in a desirable direction.
The importance of both of these factors has a direct impact on underlying processes and structures within the enterprise. So, for example, it is often impossible to meet the variable business demand with a fixed team structure, due to skillset/knowledge constraints, as well as other reasons. Instead, it is entirely logical to keep the boundaries of some teams soft, allowing for people to regroup as necessary to best respond to a significant shift in demand. Interestingly enough, the fixed part is important too, because whenever possible, we want to benefit from long-term interactions, as they are known to improve the overall team performance. Similarly, our funding cannot be all carved in stone for a long time horizon, as it would make it impossible to respond to the changing environment. At the same time, without any specific upfront allocation of funds, it would be hard to commit the necessary capabilities required for successful execution. As for planning, it gets even more interesting. Even though many organizations are nowadays trying (at least formally) to be iterative and incremental, it doesn’t imply that they are actually able to respond to change. The real question is instead: are they properly handling uncertainty in their plans. If your plan, even for a shorter time horizon (1-3 months), contains only predefined outcomes, then most likely, your organization is just blind to the unknowns. And it doesn’t actually matter that you iterate every month or two: myopia to uncertainty renders iterative and incremental paradigm useless in such environment. Every plan, no matter how long or short, has to explicitly contain assumptions, preventing the Certainty Bias from settling in and pushing the organization to a whole new level of self-deception. But then again, if the plan does not contain any specific outcomes, nobody really knows where the organization is headed.
So here are the questions for you, as a matter of quick self-assessment:
- How exactly are uncertainty and variability incorporated into your process? (consider organizational design, planning, funding, for example). For each one of your examples, try to go over the actual logic, explicit rules, proven scenarios in your environment, rather than potentialities.
- How are variable and fixed factors aligned in those examples?
- Is it really working?
- How do you know that it does or doesn’t?
Lastly, while both fixed and variable nature of organizational activities and structures is essential, there’s a little catch, and we briefly touched on it already: we are all biased towards certainty and predictability and, on the opposite, try to avoid uncertainty and ambiguity. So, when your organizational leaders are telling you something like “but we need some degree of certainty and predictability,” you need to know how to translate this Klingon speech into English. It usually means: “we are looking to define a big-upfront detailed plan, lock down the exact scope and funding, and define specific team structure that will best execute it all.” For most organizations, moderating their obsession with predictability is an insurmountable problem, so the conversation better revolves around embracing uncertainty and variability rather than the “balance”. Otherwise, you are probably just wasting an opportunity to change something to better.
By Alex Yakyma, Org Mindset.