Sticky Organisations, How They Make Smart People Stupid, and What To Do About It
This is an introduction to Relational Capital, and is the product of personal experience as an executive, working with specialist C-level leaders introducing systemic change and the facilitation of improvement and innovation specialists to capture best-practice.
The thrill of being headhunted to a senior role in a successful and knowledge-intensive corporate on the basis of expertise is only balanced by the downside of finding yourself trapped in a cycle of ritualised meetings, unable to influence the strategic direction of the organisation that paid the headhunter so well to recruit you. In such a situation, several options become available:
- Lie back and enjoy the ritual management cycle of activity (like pedalling a static exercise bike with minimal resistance).
2. - Get upset about the fact you have become a corporate adornment, that
you can’t influence the strategy, become cynical and constructively dismiss
yourself, or
3. - Get very busy working on the low-hanging fruit,
generating statistics around cosmetic activities, or
4. - Try to understand the situation, and do
something about the long-term future of the organisation.
Let me explain the relationship between a “sticky”
organisation and Relational Capital.
• All
cultures are relatively “sticky” in the sense that they resist pressures to
change.
• A
culture is a by-product of a technology stabilization process, it is composed
of the problem-solving experiences and processes involved in turning an
invention into an innovation.
• Strong
cultures continually evolve new behaviours to block change, to maintain social
stability and power structures based upon existing patterns and accumulated
reserves of mutual Relational Capital.
• The
greater the mutual Relational Capital in the network, the “stickier” the
organisation.
• The
stickier an organisation, the more pronounced its tendency to focus on the
problems it can solve, rather than the problem it needs to solve (as a means of
avoiding renegotiating existing stocks of Relational Capital; or as they used
to say in the TV show “Friends”: don’t go there!)
Relational Capital is the social “capital” you build through
establishing positive impressions and trusting relationships with key
colleagues, stakeholders and potential internal customers, through trading and
being able to bank favours at crucial times in the lifecycle of the business
and personal careers. It explains the
tendency within major corporations and political parties to appoint that “safe
pair of hands” who turns out to be a dangerous idiot (unable to recognise that
the context has changed, old customers want new things and new customers have
emerged) instead of appointing the innovator who wants to move the strategy in
a new direction, to change the rules and create new value. That “safe pair of
hands” is usually the manager who is owed the most in Relation Capital
transactions, the value of which would disappear if the technology and
direction of the business changed and made the existing transactions void.
This explains the tendency to optimise existing products,
services and business models instead of moving into the territory of creating
genuinely new value by focusing on becoming effective. If you hold a big account of Relational
Capital, would you want to give it up?
This also explains the 60-70% failure rate of systemic change
programmes. When you change organisations, you make existing Relational Capital
void.
The message is: If you are a change specialist, you cannot
put your knowledge to work within a “sticky” organisation unless you can
rapidly develop Relational Capital or consciously manage the rules of
engagement around your role in the organisation. In fact, the two are
interdependent. Without Relational Capital, you will not be invited into the “right”
meetings where you can make a contribution based upon your hard-won expertise. The reality of sticky organisations is much
like the situation of the toy aeroplane designer in the film, “The Flight of
the Phoenix”, where passengers and crew from an aircraft flying across the
desert, survive a crash and construct a cannibalised plane from the wreckage
and escape by flying out. The key dilemma that change experts often face is
what I call the “Flight of the Phoenix” syndrome. In the film, the surviving
pilot has to hide his knowledge that their expert in aircraft design has only
ever designed and built model aircraft. The principles are the same for both
structures, the differences are those of scale.
The reality of change experts in organisations is similar: they can only
operate as experts or those with specialist expertise, when the organisation
sanctions their role, which it can always refuse to do: on the basis that their
particular context is special and you couldn’t possibly understand it unless
you have been born and inducted into it. Without establishing Relational
Capital, that sanction may never arrive and the change expert may construct a
change machine that replicates the scale of the functions or business units
they are meant work with, “bulking up” in order to look like the big boys and
sit at their table, but always without the credibility that those holding existing
Relational Capital hold close to their chests.
So what options do you have?
Working Strategies
A. The Expert’s Journey to Effectiveness
Several strategies can be applied here. The first, involves
enduring a rite of passage in meetings, negotiating deeper stages of trust,
where your behaviour must be positive without appearing to threaten existing
knowledge power and established Relational Capital in the room. These will involve working your way through a
sequence of meetings, demonstrating your respect for existing Relational
Capital, meetings where provocations to your expertise will be offered but to
which you must not react.
A Simplified Relational Capital Building Labyrinth Sequence
 |
Ideally, an expert would be allowed into a meeting level 4 meeting
from the start. In reality, the expert
goes through a rite of passage (1, 2, 3 level meeting types) to socialise
them, test their “right stuff” and their willingness to respect the primacy
of existing, dominant (but often decaying) knowledge forms and their
established Relational Capital. Once
you have developed high Relational Capital, you will get invited to the real
meetings that determine survival. It may take 18 months of self-control and sticking to the
rules unless there is a significant crisis to accelerate things. |
This explains why genuine “out-of-the-box” or even “no-box”
thinking needs leadership sanction or a major crisis of survival that wipes out
the bankability of all existing Relational Capital.
The Meeting Behaviour Rules for the Change Expert
- Respect existing forms of Relational Capital, find out who has the most banked, and whose is most at risk. It may be worth working with influencing those whose Relational Capital is most in need of replacement.
- Don’t preach using your Craft Knowledge to define the problem or appropriate solution or techniques. Avoid using imported “techniques” or management-speak language.
- Use their language to define the problem they want to work on: don’t be surprised if they want to solve the wrong problem. Help them to do the wrong thing, better and get them used to listening to you.
- Don’t explain where an enabling technique comes from, pretend to invent it on the spur of the moment.
- Try to use local contextual examples rather than using comparative case studies of external practice or organisations that you have worked with in the past.
- Be patient and control your body language to mask your disbelief and emotion.
7.
These rules will not apply all the time to all
organisations: be selective.
In Luc Besson’s excellent first “Transporter” movie, the
hero (played by Jason Statham) has 3 rules. The first two apply to your
situation: 1) The deal is the deal; 2) Never open the package.
For the Change Specialist however, these “rules” need a
slight modification:
1) - Only the latest, most recent deal is THE deal. Always keep the deal
fresh and documented.
2) - Always open the package. Make sure you know
what’s in the deal and what’s changed.
The optimal moment for making yourself effective and
managing the power of other peoples’ accumulated Relational Capital and their
need to devalue any that you may develop, is the moment when you are appointed
and when you have the opportunity to negotiate “the deal” around those elements
that must be managed in order for you to deliver your best to the organisation.
Fundamentally, this involves objectifying the ambition of
the organisation out of the context that drove your appointment, by defining
the key “chunks” of your programme in terms of time, resources and political
backing required in order to deliver.
This needs to be documented in some form of Memorandum of Understanding
with the CEO, and other functional heads.
In reality, we all know that customers change their minds, stuff
happens, reality shifts and ambitions shrink and expand. The key thing to remember is that when the
Deal you have drawn up with the Organisation can no longer be operationalised: then you must renegotiate the Deal and all the
detail involved.
Failure to renegotiate when circumstances change, on the
assumption that everyone after all, was in the same meeting and has a shared
understanding of the new circumstances that delayed your programme or
reprioritised investment, is dangerous and naive. Someone, at board level will exploit that
curious collective amnesia and groupthink of top teams and degrade your growing
Relational Capital by pointing out that you have failed, the whisper will grow
to become fact. So being right in
retrospect, is not a defence.
C. Get Close to the Strategy, Help them to
Know What they Really Want, plus the Linguistic Torpedo
One of the problems of being a change specialist lies in the
temptation of going out and harvesting the Low-Hanging-Fruit. This appears to be a good thing at the time,
but when you have harvested the LHFs, and applied local and tactical solutions:
you will inevitably get faced with the tough, systemic issues that no-one wants
to address because they are about the decay of the core technology that
everyone has learnt to stabilise, and its replacement. And those with the most Relational Capital to
maintain and lose in acquiring a new technology and riding it, must fight for
efficiency and destroy the arrival of alternative strategies with the potential
to deliver new effective value in the market and a new cohort of leaders who
will establish their own more recent, and more highly-valued currency of Relational
Capital.
The difficulty of working with customers is that often they
don’t and cannot know what they want until they see it, or they hear themselves
saying it out loud. There’s a great
story in the Daily Telegraph about Professor Martin Elliott and his
hole-in-the-heart team at Great Ormond Street Hospital for Children[i]. It was only after years of attempting to
apply lean techniques to their procedures, and benchmarking with the aerospace
industry (which was seen as sufficiently high status), and after a “particularly bad day at the
office” that Martin Elliott and his colleague Dr. Allen Goldman sat slumped in
front of the television, accidentally watching a motor racing grand prix, that
the two of them simultaneously became aware of the similarities between the
handover disciplines from surgery to intensive care and what was going on in
the pit of a formula one racing team.
In effect, lean thinking (in their current frame of mind or
context) could only take them so far. They needed a systemic shift that moved
them from focusing on efficiency to becoming effective: in other words, they
needed to change the mental rules behind the way they expected to do business
if they were going to innovate.
So how do you get the CEO to want something they don’t know
they need, to want something new and different which would devalue all existing
stocks of shared Relational Capital? The
trick involves three items: proximity, questioning and language. In other
words, to get close to the strategy, ask the right personal question about
ambition and legacy, and to infect the organisation with the language of the
future.
Strategic proximity can begin by offering to facilitate
tactical chunks of the strategy, or to lead warm-up sessions to widen the scope
of thinking about the future – without asking to be involved in the
deliberations of the core team. Once they feel comfortable with you, Relational
Capital will be established and you can get closer to facilitating the
strategic discussion itself.
Once you have done this, you can begin “Asking the Right
Question” which involves extending your facilitation approach into discussions
in confidence with the CEO or senior leader to help them craft what they want
to achieve in terms of their legacy to the organisation. Hopefully this isn’t a
new building or a statue!
Part of the above process, the third leg of the stool is
what I call the “Linguistic Torpedo”.
Until people in the organisation have the language to describe the
problem or to name the solution to the problem that everyone sees, they find it
difficult to act. Linguistic Torpedo is
where you specify a problem and its solution in non-bullshit characteristic
language, naming them and introducing them to at least 5 key meetings with
people you want to influence, and saying it at least 3 times in each
meeting. You may have to muddy
authorship in these meetings, suggesting that you have heard people in the
organisation using these terms. This requires patience, but within 6-9 months
you may hear your idea coming back to you (like the boom of a torpedo hitting
the target and echoing back to the submarine hunter, magnified by power of water
to carry sound). If you do it right, people
will not remember you as the source and will honestly believe that they have
invented the terms.
Final Warning
Obviously the key to being a great change specialist lies in
being ambidextrous: developing the ability to feed today’s ravening numbers
“beast” whilst also helping leaders and potential leaders to dream new dreams,
able to facilitate thinking and change around both efficiency and
effectiveness.
We need to develop both capabilities, but these require
conscious management of your behaviour and interactions to grow Relational Capital,
the ability to renegotiate robustly as circumstances shift, and a willingness
to serve when it comes to “seeding” and influencing the strategic conversation
about the future of the organisation, and the new technologies, products,
services and business models required in a world where the S-curve around
knowledge lifecycles is becoming increasingly compressed and in need of continual replacements.
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