Reliable Organizations

 

By Drew Marshall, Regional Managing Director - Kepner-Tregoe North America

Leading and managing any team these days is an exercise in endurance. For many of the leaders I meet it feels like each morning (or week, or month – when they can see that far) they have a plan and then…well, in polite circles we say, “stuff happens” with the velocity of a firehose. These leaders meet each day with strong intentions. Their teams are solid, filled with decent people willing to work hard. They have a high degree of competence. Yet, the onslaught of the unexpected puts them on their back foot if not sends them, and the best of their intentions, sideways. They are almost perpetually out of balance.

A large financial services company I know has been struggling for years in the face of what to about the rise of consumer-focused fintech firms. Their business model is fracturing. Their value stream is beginning to unravel. Their ability to shift is hampered by the competing need to shore up what is working and figure out what is next. What was a stable economic engine with good prospects for long-term growth is on shaky ground. Challenges are coming at them from all sides.

Unstable organizations are not able to compete effectively. Endlessly confronted by shifting external forces and changing internal demands even the best among us can be ground down. Rather than responding from the perspective of value generation we slide into firefighting which makes it seem like everything is hot, and critical, and terribly urgent. This is not the case but, we don’t recognize what is going on because our horizon awareness has shrunk to the space immediately before us.

What is happening is not firefighting, it is more like wading or swimming. Most organizations are not on fire. They are saturated. Saturated in problems and pressing needs, leaders in these organizations are struggling against a tide of information and the pressure to act. They are not even problem solving at this point. They are problem coping and, not doing terribly well at that either.

Problem saturation leads to firefighting and the misallocation of resources focusing on low value-add activities at the expense of long-term benefit and gains. In “Managing the Unexpected” Karl Weick and Kathleen Sutcliffe called out this behavior. They noted that in the face of tackling an onslaught of issues we rely on our expectations to reasonably sort and organize what needs to be addressed first. Over time as our expectations are met, we tend to think that confirmation is proof, and we are right in our assessments. Furthermore, we actively seek out evidence that confirms our expectations – “Hello!” confirmation bias.

Then startlingly and suddenly, everything goes horribly wrong. Recovery is difficult, consuming more resources than we would like, we seem to get things back in order, and the cycle continues. Ever vigilant for the next horror to happen, we struggle for alertness because we face an ongoing preference for information that confirms. We need distance from our data.

What’s missing is a mindset that supports what Weick and Sutcliffe call, “high reliability organizations” (or HROs). This mindset is focused on managing the unexpected through situational awareness, sensemaking (gathering, sorting, organizing, and assessing priorities), and staying in motion through decision making, targeted problem solving and effective risk management. All of which sounds great, yet many of the more self-aware leaders I work with assess themselves and their teams quite poorly in this regard. They believe that these skills should simply be innate.

Building an HRO requires planning and effort. It demands the establishment of an organization with a constructive culture focused on achievement, and one that shares a common language for issue resolution, above and beyond the necessary expertise and specialty knowledge critical for strategic success. Many incredibly smart organizations have been overwhelmed by the pressing needs of serving their existing customers with their current products and services only to discover that those customers’ needs have shifted, and their organization is no longer fit for the purpose of reliably creating value.

A leader seeking to build an HRO must help her or his team grow beyond the tyranny of the urgent. They need to work to build a team that communicates effectively, that has the flexibility, agility, risk-capacity, and resilience, to persistently forge a new path. They don’t need group think but they do need to collaborate and think as a group so that they can solve their most pressing problems and turn towards realizing their future.

What of the financial services company I mentioned earlier? Well the jury’s still out. They have recognized that they can’t survive if they don’t change and that requires them to let go of some of what made them successful in the past. They remain in a cycle of reactivity. While they are making changes, old habits die hard and the unexpected keeps occurring with alarming regularity. In the absence of a common language for responding to the unexpected, they may not make it to become an HRO.

With high reliability comes higher performance. When your organization can work in concert because they know how to make their thinking visible, to share it willingly, invite participation, and apply the best that everyone brings to the table, good things happen, and results are delivered. Higher performance comes, even in the face of the unexpected, when your organization reaches beyond the current circumstances to tackle the challenges of the future. But if you are only ever problem coping and never working effectively to problem-solve you’ll forever be stuck in the past.

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For over 60 years, Kepner-Tregoe has empowered thousands of companies to solve millions of problems. Kepner-Tregoe services are designed to permanently address organizational challenges with measurable results that improve quality and performance while reducing overall costs.