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We asked our clients about the evolutions and transformations that are on their radar. Here are six hot issues that cross sectors and industries and will have noticeable impacts on both operating systems and culture:
Data and information are allowing brands to target individuals in a bespoke manner; no more will we see the need for mass marketing such as TV and print advertising. Instead, tailored messaging across dynamic channels and based around the needs of an individual or business will become the norm. We are seeing it already online, but this will advance rapidly over the next few years. Organisations that develop frameworks to capture and analyse data will be best-placed to develop leading marketing and selling approaches in the future. This requires digital transformation in tandem with a reworking of traditional organisational structures and job roles that need to be addressed quickly in order to remain competitive.
Artificial intelligence is already here; from roboadvisers (Nutmeg, Wealth Wizards and Wealth Horizon) to voice technology (Alexa, Siri and Cortana) we are already affected by new technologies that are rapidly permeating our daily work and personal lives. Despite some push-back from consumers and organisations progress in these areas is inevitable and those that resist may well lose their competitive edge. No-one knows how much AI will impact our homes and workplaces and even Sergey Brin, the co-founder of Google, admitted at this year’s Davos meeting that he did not foresee the artificial intelligence revolution that has transformed the tech industry. What’s clear is that organisations must still embrace and harness new technologies to at least replace mundane, time-consuming daily tasks that are not profitable or satisfying for individuals. This frees up its workforce to spend more time thinking innovatively and being more productive as echoed by Sergey Brin, co-founder of Google who said: “I would hope that, as some of the more mundane tasks are alleviated through technology, that people will find more and more creative and meaningful ways to spend their time”.
We’ve heard a lot about what Millennials want and how they are re-shaping the way we do business. Now Generation Z is bringing their influence to the global economy as they come of age . We know, for example, that Millennials are demanding more of their brands than ever before; from ethical sourcing and environmental considerations to real and deep & meaningful community activities. Basically, they want brands to hold relevant values and exhibit behaviours that meet their expectations like no generation has done before them, and this applies to the Brands they work with too. At Innovation Arts, we spend a considerable amount of time talking to our clients about how their brand can evolve culturally and strategically and we advise building in responsiveness and agility to allow for these shifting needs.
We’re not talking about the latest iPhone or Samsung iteration but a flexibile, nimble approach that allows organisations to constantly be on their toes responding to customers, consumers, their stakeholders and wider communities. This requires a new way of thinking and a corporate culture that is designed against a new model – maybe a model that we haven’t yet experienced. The organisations that puts innovation at its core will win; whether your sector is financial services, charitable, education or manufacturing.
Leveraging the creativity and innovation within your teams should be a priority. If that means a blend of at-home and office workers, then so be it. If your teams are scattered across the globe and speak different languages, then your organisation’s design must be able to effectively support and benefit from this. Modular working, part-time and flexible working will reinvent themselves. Your teams may already be thinking (and hoping) that you are planning and designing for an agile and flexible future!
A combination of artificial intelligence, a changing workplace and a redefining of roles should lead to a more productive life-work balance. But where does work and life start and end? Whose responsibility is it to support employees in eating well, getting fit, productive relaxation time, enjoying their family and friends? The lines will blur as employers and employees merge to support one another – look at Google whose sole job is to keep employees happy and maintain productivity. Their efforts may just be the start, but they go beyond a couple of bean bags thrown into a brightly-painted corner and free gym membership. Their offer to employees includes free breakfast, lunch and dinner, free health and dental, free haircuts, free dry cleaning, gyms and swimming pools, hybrid car subsidies, nap pods, on-site physicians and death benefits.
We believe that leadership teams should already be investigating, imagining and modelling for their own organisation in order to prepare for and capitalise on these issues. But the way we do that is changing too:
In the past, responsibility to reshape corporate culture, values and behaviours was the domain of the leadership team, and the leadership team only. From our experience of working with many leading global brands, your employees and teams are often one step ahead in their thinking when it comes to the future of their organisation. That’s why our Design Thinking approach is so effective at helping organisations to re-design their culture as it requires the wider team to design, model and iterate a brighter and more effective future. When strong leadership engages with all levels of the organisation, nothing can stop you. If you would like to know more about how our Design Sessions and Games Science can address issues around the future of work within your own organisation, please contact us for a free consultation at firstname.lastname@example.org.
For many years leaders have wrestled with the discomfort of giving up management-style control in order to reap the benefits of achieving mastery in personal and organisational leadership. Leaders have looked to various theories which offer possible ways to ‘safely’ approach this ideal. For example:
Considering the X, Y and Z theories in the last post, and applying them in the practical sense, we could conclude that at a deeper level of understanding, there is no ‘one best way’ to influence people; it is largely a consequence of a number of different elements. Situational Leadership defines these as being the amount of guidance and direction (task behaviour) a leader gives, the amount of socio-emotional support (relationship behaviour) a leader provides and the readiness level that followers exhibit in performing a specific task, function, or objective.
The concept defines four leadership styles: Telling, Selling, Coaching and Delegating. The ultimate aim is to be able to reach the level of organizational maturity where delegation is pervasive. Hersey and Blanchard, the proponents of Situational Leadership, argue that when we take on a new task we all begin on the ‘dependent’ end of a continuum from fully dependent to fully independent. Then, each of us will move up the maturity scale at different speeds, depending on our experience, our abilities, our sense of self-worth, and the responses we get from our leader. At each stage, the leadership style to be employed can be determined by two points of view: the worker’s ability to do the task and the worker’s willingness to do the task.
J. Stacy Adams identified that workers are in a constant process of observation of the fairness of the outcomes of their own work compared with the outcomes of the work of their perceived peers. In this sense the worker defines his or her value based on a notion of equity with the organizational environment, implying a strict relationship between the two. Where there is little or no discrepancy, the worker perceives equity and is therefore satisfied. Where there is discrepancy, there is a perceived negative equity and the worker then actively seeks to restore the imbalance. This may take the form of negative action such as a drop in performance or a psychological or physical withdrawal from the status quo.
Positive equity, on the other hand, has the opposite effect. The role of the manager in this situation is to identify, understand and take appropriate action to stem negativity and build positivity; this means re-establishing and building ‘willingness’ through dialogue and, if appropriate, matching perceived value.
Victor Vroom’s 1960s theory states that an employee’s ‘Motivational Force’ is dependent upon three concepts: Expectancy, Instrumentality and Valence. Expectancy is the belief that the worker’s effort will result in the achievement of the desired performance goals (the desired end state of Cybernetics?). Instrumentality is the belief that should these goals be achieved a reward will be given. Valence is the value the worker places upon the value of that reward.
This provides a closer match to our understanding of situational leadership: if a worker is to be motivated, he or she not only has to believe the performance measure (or ‘task’) is achievable but that, once achieved, the reward will be of an appropriate value.
In OB Mod, the motivation of workers is said to be a direct result of the external consequences of that workers behaviour. As such, behaviour can be seen to be reinforced according to a continuum of consequence, the poles of which are positive and negative.
Positive Reinforcement implies strengthening a behaviour through the application of a pleasant consequence. Negative Reinforcement implies strengthening a behaviour through the removal of an unpleasant consequence. Within this continuum also lies a neutral consequence which is said to lead to an extinction of behaviour through no reinforcement at all and a punishing consequence which, again, is said to lead to an extinction of behaviour.
The above theories are all interesting models which in the past have provided leaders and managers with a set of tools to understand and maybe develop their own mental models. However, they all share something in common: a very pragmatic way of managing and one that is not necessarily appropriate in the world of today.
Maybe that’s you?
This shift away from physical to mental labour is interesting when we think back to the idea from cybernetics that people are a dynamic, purposeful component of the complex system. Perhaps when the majority of workers were concerned with the transformation of physical inputs into a final product, their scope for influence on the system was relatively limited, and the management hierarchy was relatively flat. Now though, we know this is rarely the case. Knowledge workers certainly fit the picture of purposeful components within a purposeful system, operating within a context of responsibility, which may be either management-driven or leadership-driven depending upon the developmental maturity of the organisation.
When we start to investigate the purpose of these ‘components’ in order to understand how they engage with the broader system, it’s useful to explore the different theories of employee motivation.
Douglas McGregor in the 1960s expounded the notion that workers conform to one of two types of categorisation: They are either Theory X or Theory Y. Theory X infers a dislike of work and a need for coercion, direction and control to meet the needs of the organisation: A need to be managed. Theory Y implies the opposite: Work can meet their higher psychological needs but to do so, self-direction and self-control must pervade. This is an interesting proposition. Considering we are all model-making, meaning-seeking beings this model immediately forces us to recognise that we may or may not be operating from one of these points of view. It is a potentially useful model as it allows us to consider where we stand vis-à-vis our colleagues and collaborators.
In the 1980s William Ouchi developed another category: Theory Z. This is an extension of the Y point of view, stating that people in this category actively seek responsibility and in light of this, organisations should empower these employees to participate in decision-making activities. (Interestingly, there had been proponents of this since the 1950s born out of disagreement with Taylor’s doctrine of ‘Scientific Management’). The notion of a ‘Self Managing Work Team’ was given a theory-based grounding and has since come to embody all that leaders desire and yet, simultaneously, fear.
The term cybernetics was coined in 1947 for a new discipline that had emerged out of research into the control of physical systems. Norbert Wiener and colleagues chose a name adapted from a Greek word meaning ‘steersman’. This, it was felt, would invoke the rich interaction of goals, predictions, actions, feedback and response in systems of all kinds: mechanical and physical systems, but also biological, cognitive and social systems, abstract intelligent processes and language. Wiener’s own simple definition for cybernetics was this: Communication and control in the animal and the machine.
Cybernetics is neither holist nor reductionist. Rather, it takes the philosophical perspective that the whole can be analysed as a set of components within the context of their organisation. It is that organisation which will account for interactions between components, and the way they in turn affect the system.
One of the most fundamental concepts of cybernetics is its approach to equilibrium and change. Cybernetics takes the position that an entity behaves in a way to keep certain conditions as close to a desired state as possible – an equilibrium – and then seeks to understand the actions required to maintain these conditions. This understanding is also fundamental when applied to a system’s effort to effect change by moving towards a goal (or new equilibrium).
These efforts will be composed of, for example, observing or perceiving, organising observations, comparing these organised observations to the desired state (which is a function of memory) and taking corrective measures should the gap between current and desired state be too large. A further role of the memory may also be to record previous corrective measures used and the context in which they were taken.
The ability of the system – be it the human body or a complex enterprise – to observe, make comparisons and decisions and then be in action is the very essence of ‘steersmanship’ and hence is cybernetic.
As you can see, the implications of cybernetics touch on the most philosophical questions of our work: observation, interpretation, meaning and understanding. They touch upon who we are, where we stand in the face of reality, what decisions we make and how we make them.
In business (and in life) we like to think we make decisions based on our knowledge of a situation, yet cybernetics’ epistemological approach – where the observer and the observed are both seen as parts of the same system – suggests that our perspective, and our behaviour, cannot be separated from the system itself. Cybernetics forces us to consider what the limits to our true knowledge are and we understand that our reality may be nothing more than a self-maintained mental construction to help us get along: A mental model. And as we’ve said before, (and will likely say again!) “all models are wrong. Some are useful.”
Cybernetics puts human perspectives and behaviours at the heart of any attempt to model the complex system of an enterprise. Since humans are capable of developing their own goals and desired states the implication is profound: We can define organizations as being purposeful systems of purposeful components – people. Thus by understanding more about the motivations of the people we will come to know what truly controls the system we desire to shape.
Even for those of us in the habit of asking curious questions, this one may seem to have an obvious answer: Taking a functional view can provide economies of scale due to the encouragement of and access to specialisation. Similarly, the functional view can facilitate increased skill development and is easier to supervise as there are generally clearly defined activities associated with each role – with specialists not having to be responsible for administrative work. A functional approach may also lead to higher morale as it engenders similar norms and values within each department.
You will have heard tell, though – perhaps you even have stories of your own – of times when working in an organisation with functions becomes dysfunctional. When functions become silos, and it is difficult to co-ordinate work across them, for example. At the very least this can result in bottlenecks and the sub-optimal use of resources. It may also lead to an increased need for the co-ordination of activities within the organisation, where manager decisions tend to pile up at the top. In the same way that managers become functionally focused, it has also been argued that this tends to distract from a greater understanding of the business as a whole which can in turn lead to a narrow, short-term focus on functional goals.
So, would you describe you or your organisation as functional or dysfunctional? Is there a middle ground? Functionally dysfunctional (and vice-versa)? What box would we put ourselves in if it was a 2×2 matrix (apologies, I was once a proper Management Consultant) and would we agree which was the best box?
I think where we can agree is that a functional view is going to be useful in understanding how an enterprise…functions. Or doesn’t function. It’s just not the whole picture. As an approach it has its limitations.
Through our bespoke Design & Decide approach, we can help you to bring the best of the functions within your own organization together to tackle the complex issues you face. We can help you look at things in non-functional ways too. By breaking down preconceptions and old habits within the system, functions can behave as fully integrated parts of a team committed to working in the same direction to achieve shared objectives.
Why does curiosity diminish as we get older? Perhaps because we augment it with experience.
We all have experience that guides our intuition about how the world works. How many of your day-to-day decisions are guided by your personal experiences? I know many of mine tend to be. I form opinions based on my most recent experiences working with the many organisations we serve, facing today’s complex challenges. But also from timeless lessons I have learned during my long and on-going apprenticeship in enterprise. I can trace some back as far as my first real venture into earning money and understanding its value: my first paper-round. Some of today’s issues seem modern and unique, but others are timeless. I first learned about customer service, for example, and the importance of face-to-face interactions, when I grew too big for my paper round (marginally, some would argue) and began working in restaurants. The lesson that you should always treat everyone and everything along the way with respect is applicable whether you’re dealing with a half-million-pound consulting contract or a fifty-pound restaurant bill.
We all learn and grow through our experiences. However, as I remind myself every day, this is never enough. Our experience, and that of the experts we turn to in need, is a double-edged sword, showing us the way and yet sometimes blinding us to the obvious. Experience gives us business texts, articles and opinions, but most (if not all) of those I’ve read over the years seek only to peddle solutions, sometimes solutions to a problem that is ill-defined or misunderstood.
It has never been more evident to me that there is no clear recipe for success. Sometimes, even when all the right ingredients appear to be in place, something might fail – or, more puzzling still – when it feels like we’re missing something, astounding results are achieved. Why can’t we predict these unexpected failures and successes? The future is rational only in hindsight (as the axiom goes).
This is why – although now CEO of my own business with my years of studying business and management a long way behind me – I consider myself to be an eternal, curious student. It’s an approach that never ceases to intrigue, surprise, sometimes delight and (often) dumbfound me.
Our constantly changing world means that the experience and knowledge we have gathered along the way has a shelf life, and I believe it is not those with the right answers who will survive, embrace and drive change, but those with the right questions.
That’s where we come in. At Innovation Arts, our commitment is to help you develop your own solutions to the complex challenges you face, but we never start by looking for answers. First, we help you decipher the right questions. While the process is tough, it works. And it delivers outcomes that you may never have expected.