building the confident organisation - lbs professor richard jolly

Building the Confident Organisation

LBS Alumni Reunion 18th May 2012 Professor Richard Jolly

148 Dunbar’s Number

The Post-Industrial Age

“Managers differ in their ability to survive and thrive without bureaucracy. What is an opportunity for some managers, is distress for many others.” (Burt, 1996)

In a world where unique human capital is increasingly rare, your ability to get things done through other people becomes critical

This involves an increasing ability to handle complexity

VUCA

V = Volatility – The nature and dynamics of change, and the nature and speed of

change forces and change catalysts.

U = Uncertainty – The lack of predictability, the prospects for surprise, and the sense

of awareness and understanding of issues and events.

C = Complexity – The multiplex of forces, the confounding of issues and the chaos

and confusion that surround an organization.

A = Ambiguity – The haziness of reality, the potential for misreads, and the mixed

meanings of conditions; cause-and-effect confusion.

“The great uncertainty of all data in war is a peculiar difficulty, because all action must, to a certain extent, be planned in a mere twilight, which in

addition not infrequently – like the effect of a fog or moonshine – gives to things exaggerated dimensions and unnatural appearance.”

Carl von Clausewitz (1780-1831)

Prussian General and Military Theorist

5

The ‘Fog of War’

6

"There is always an easy solution to every human problem – neat, plausible,

and wrong.” H.L. Mencken, 1917, “The Divine Afflatus"

The ‘Fog of War’

Organisations are operating in more complex, inter-dependent environments – Therefore need more complex strategies and

structures – And the rise of specialists to help us navigate a

world we increasingly don’t understand – General management increasingly is not trusted

– It is specialists who are the trusted heroes

The Rise of Super-Confident Specialists

The Fantasy of ‘Universal’ Confidence

It is increasingly hard to be ‘universally’ confident when confidence comes from our specialist expertise Confidence is a state of mind, but it is also an

‘attribution’ – We desperately want to believe that things are

under control – Other, confident specialists have the answers – Processes and safety mechanisms will protect us

This Leads to ‘Risk Compensation’

More Safety Mechanisms Create the ‘Illusion of Control’

The Law of Unintended Consequences • Fermi nuclear plant in 1966 – zirconium filter fitted by

Nuclear Regulatory Commission • Piper Alpha oil rig – safety device to prevent seawater

pumps triggering automatically • RMBSs – complex legal safety mechanism to alter the

distribution of mortgage default risks • CDSs – insurance for banks investing in CDOs against

them failing to pay debts

Presenter

Presentation Notes

Tightly-coupled systems are inherently dangerous Build momentum fast: hard to stop as the cliff approaches When combined with complex environments, accidents are inevitable

An Attack on Rationality

“It is hard to overstate the damage recently done by leaders who thought they knew more about the world than they did – the managers and financiers who destroyed great businesses in the pursuit of shareholder value; the architects and planners who believed that cities could be drawn on a blank sheet of paper; and the politicians who believed they could improve public services by the imposition of targets. They failed to acknowledge of the complexity of the systems for which they were responsible and the multiple needs of the individuals who operated them.”

(John Kay, FT, 20th March 2010)

The ‘Confidence Trick’ Has Been Exposed

Disease is spreading through our organisations…

Hurry Sickness: Do you…?

Look for a 30-second task while micro-waving

Get a buzz from JUST catching a plane/train

Have to do something else when you drive

Eat at your desk (whilst also checking your emails)

Do something else whilst brushing your teeth

Get impatient when waiting in line/traffic

Find your mobile phone painfully slow

Hate the time it takes to boot up your computer

Find yourself interrupting other people frequently

Do something else in telephone conferences

And finally…

Push ‘door close’ buttons on elevators

“When you’re fighting off the alligators, it’s hard to

remember you were trying to drain the swamp.”

It’s Harder to Think in Complex Environments

Two Delusional States

Over-confidence – Arrogance – Hubris – Grandiosity – Intimidation

“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”

Mark Twain (1835-1910)

Over-Confidence

Two Delusional States

Under-confidence – Learned helplessness – Victim of circumstances – Bystander Effect – ‘Downtown Calcutta in mid-summer’

How Do We Cope with Greater Complexity?

‘The test of a first-rate intelligence is the ability to hold two opposed ideas

in the mind at the same time, and still retain the ability to function.’

F. Scott Fitzgerald 1896-1940

A Confidence Spectrum

Under-Confident Confident Over-

Confident

“What matters is not age but the trained ability to look at the realities of life with an unsparing gaze, to bear those

realities and be a match for them inwardly.” Max Weber

Able to deal with reality as it is Able to handle uncertainty

Can cope with the unexpected – agile Resilient

Presenter

Presentation Notes

Weber –look at the realities of the world with an unsparing gaze and be a match for them inwardly. Always in flux, continuously contingent. No end point – always process, no point of total rest. If you don’t admit the complexity and search for certainty, need to close your eyes to other things and end up doing terrible things. Totalitarianism desires predictability and get messiness of the world to conform. Difficult conversations can go anywhere.

What are the behaviours of confident organisations?

Communicate – Ask Questions and Listen

“The wise man doesn’t give the right answers, he poses

the right questions.” Claude Lévi-Strauss 1908 - 2009

The 7 ‘C’s – Behaviours of Confident Organisations


Communicate – Ask Questions and Listen Control the Right Things – Empower the Rest

Collaborate – Shared Tasks Courage to Take Wise Risks


Communicate – Ask Questions and Listen Control the Right Things – Empower the Rest

Collaborate – Shared Tasks Courage to Take Wise Risks

Challenge – Difficult Conversations Compete – Hungry to Win

Create Confidence in Others – Belief

building the confident organisation - lbs professor richard jolly

Education

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