David's Blog

Don’t Mistake Outputs for Inputs: The Folly of Trying to Plant “Cut Flowers”

Why does so much management advice sound reasonable but turn out to be of little value? Most readers will know what I mean. Take the following guidance on how companies can ‘accelerate their agile transformation’:

  1. Create a C-suite with an agile mindset
  2. Hire and develop the right mix of talent
  3. Foster an agile-friendly culture and organizational structure

What’s not to like? Well, that’s the problem. The first test of any management advice is to ask, “Is the opposite also true?” If not, then the statement is a simple truism like each of those above. Clearly one wouldn’t want a C-suite with an anti-agile mindset nor a firm with the wrong mix of talent and so on.

Nevertheless, some truisms bear restating because they deal with priorities – necessary conditions – without which change efforts may fail. So, we should look at this advice more closely. The problem is that each of the sentences is a linguistic trick. It starts with a verb, which makes it sound like an action, but it’s really an achievement, a desirable outcome. This is why one can’t disagree with them. They are like cut flowers: the spectacular result of a creative process but not its cause. They are emblems of success, outputs not inputs. To be truly helpful these generic ‘whats’ will have to be turned into specific ‘hows’ – how to ‘create a C-suite with an agile mindset’ in this organization, in our situation, with these people, right here, right now. And that’s where things get difficult. Every organization is different: history and context matter. Priorities will differ and what works in one situation may not work in another. And in the end it will turn out that the cluster of attitudes we call an ‘agile mindset’, like so many other ‘success factors’, is itself an emergent property, a consequence of a successful change effort, not its cause.

Many writers gloss over these problems by treating corporations as if they were rational decision-makers, actors in their own right, with clear goals. Companies are said to have ‘found ways to infuse a higher-purpose calling into their culture’, they ‘leverage their core capabilities to enter new growth markets’ and ‘unleash the creative abilities of their people’. Personifying corporations as actors in their own right may be useful for headlines but it’s unhelpful when we are trying to understand cause-and-effect in complex systems. When The New York Times publishes a report that “Boeing Fired Its Leader” its journalists are using writers’ shorthand to report the outcome of a complex process, not to describe the decision of a lone actor.

What Is To Be Done? Grow Your Own Flowers!

Peter Drucker contended that a every business had two tasks: the one administrative, the other entrepreneurial. Administration is needed to make the today’s business effective (efficiency is a minimum condition) and entrepreneurship is needed to create tomorrow’s business. These are the twin elements of performance.

Unfortunately, these two activities demand different logics, the one analytic and the other integrative. Administrative logic is that of the engineer: breaking down complicated mechanisms into their elements, identify causes and optimizing the parts to improve the whole. Or perhaps it that of the plumber: clearing blockages and stopping leaks. Whatever the metaphor, it is an analytic process and it has been the default approach for Anglo-American managers for the past seventy years. It is necessary but not sufficient. Used on its own, it has been the root cause of a lot of true-but-useless management advice that ignores history and context.

For the logic of entrepreneurship is integrative, synthesizing rather than analytic. It is more like that of a gardener than a plumber, someone who brings together people and resources: selecting people for their growth potential and the contributions they can make and then creating and maintaining the conditions in which they can grow, individually and collectively.  It’s about anticipating effects through pattern recognition developed through experience from the past, mixed with a vision of future. Gone are the clarity and certainty of administration to be replaced by the confusion and uncertainty of innovation.

The twin logics are often described as scientific management and humanistic management respectively, but the relationship between them has been a vexed one. As recently as a decade ago Adrian Wooldridge, Bagehot columnist for The Economist, described it as a ‘battleground’ between hard and soft management.  Paradoxically, successful entrepreneurial activities have plenty of vision, leavened with strict observance to detail and process There is a complex dynamic between contradictory, yet interdependent processes. The result is dilemmas that have to be lived, rather than problems to be solved.  With dilemmas, opposites are always true, depending on the context. To plan for the future we have to know the past.

Thus the practice of management is all about sense-making, using the integrative powers of narrative to make sense of the situation in which the enterprise finds itself, what the people know and can do and the actions the situation demands. It is about creating the conditions for emergence. It’s about helping individuals understand their own stories, make meaning from their experiences and anticipating what might happen.

Ancient Wisdom

This blog began with some simple truisms so it’s fitting that it should end with some profound truths. This is the wisdom from the past that, it sometimes seems, we have to keep on discovering and rediscovering through experience:

Over a century ago, management pioneer Mary Parker Follett (1868-1933), one of Drucker’s greatest resources wrote:

“The skillful leader then does not rely on personal force; he (sic) controls his group not by dominating it but by expressing it. He stimulates what is best in us; he unifies and concentrates what we feel only gropingly and scatteringly, but he never gets away from the current of which we and he are both an integral part. He is a leader who gives form to the inchoate energy in every man. The person who influences me most is not he who does great deeds but he who makes me feel that I can do great deeds.” (The New State, 1918)

And 1,500 years before Follett, Lao Tzu, the semi-legendary author of the Tao Te Ching, wrote something like this:

Learn from the people

Plan with the people

Begin with what they have

Build on what they know

Of the best leaders

When their task is accomplished

The people all remark

“We have done it ourselves.”

Commentary

Regular readers of my writing will recognize this blog for the 2022 Drucker Forum as a modified and much abridged version of https://www.linkedin.com/pulse/true-useless-why-so-much-management-advice-sucks-what-hurst-frsa/

Over forty years ago I went through a management experience that changed my life and career path. The firm I was working for was taken over in a leveraged buy-out that went spectacularly wrong. For the next four years we managed through chaos to a new order, transforming people in the process. The HBR article I wrote and subsequent book became “best sellers” and set me off on a decades-long quest to understand what had happened to us and why.

Now, forty years later, I think I have a better idea of what the real issues are. It all begins with the acknowledgement that the tensions between scientific and humanistic management are part of a much deeper set of dualities that spiral throughout our existence as individuals, families, communities, organizations and societies. They have grown in complexity as our cultures and our institutions have grown more complex. They coil through philosophy in general and the history of management thought in particular. Here the dualities are familiar; exploitation vs. exploration, calculation vs. judgement, individual vs. team, performance vs. learning, detachment vs. immersion and so on and on.

To grapple with the tensions – the dilemmas and the paradoxes that underly them – it is helpful to adopt a dual-process approach to cognition. Such frameworks have been around since the beginning of recorded history, but they are more prevalent in Eastern thought e.g. Taoist philosophy, than they are in the West. This is starting to change e.g. Daniel Kahneman in his 2011 book Thinking, Fast and Slow. He, together with some other cognitive scientists, call them System 1 and System 2. System 1 a.k.a. ‘intuition’ is unconscious. It works fast, effortlessly and associatively and it is often emotionally charged. System 2 a.k.a. ‘reasoning’ is slower, conscious, effortful and deliberately controlled. It often follows rules.

Kahneman set out to show the flaws in System 1 and developed what has been called the heuristics and biases (HB) approach. It has been widely embraced by mainstream Anglo-American management thinkers, who are devoted to the Rational Choice Model and System 2. The HB approach has been criticized by people like Gerd Gigerenzer, who demonstrate the power of System 1 to make “fast frugal” decision under conditions of uncertainty. More recently I have learned of Gary Klein’s work on Naturalistic Decision Making (NDM) that throws light on what we mean by intuition. Klein has studied how experts (firefighters, emergency room personnel etc.) make decisions under conditions of time pressure, high stakes, inadequate information and uncertainty.  He found that they do not identify options, evaluate outcomes and use rational choice models. Instead, they used their experience (personal and vicarious) to recognize patterns, simulate the results of actions and then act. Interestingly Kahneman and Klein wrote a paper together titled “Failure to Disagree”. In it they agreed that HB seemed to work as better approach in laboratory situations dealing with toy problems, while NDM was better in practice handling real ones.

In short, when you are trying to make sense of people, enterprises and management, history and context matter!

The Ecology of Digital Transformation: Sense-Making in Silicon Valley

The “Cradle” of Silicon Valley – the Hewlett-Packard Garage at 367 Addison Avenue, Palo Alto (hpmuseum.net)

I have just returned from a week of “educating” in Palo Alto, where the third residency module of the 2022 De Groote EMBA Digital Transformation was taking place. Palo Alto is, of course, the epicentre of the great disruption known as “digital transformation”, the focus of this EMBA. The week consisted of formal “teaching” sessions combined with field trips to local enterprises and presentations from and meetings with local experts in a wide variety of topics.  For the excited EMBA candidates and the faculty it’s the highlight of the program. As one travels from the airport to Palo Alto itself, the highway is lined with buildings bearing the names of corporations that have featured so prominently in the revolution. Their names appear constantly on the business pages and they feature in business cases everywhere. As we turned into Page Mill Road on our way to the Stanford University Campus, I tried to remember why the name was so familiar. It was only when we passed the Hewlett-Packard head office that I realized that 1501 has been its long-time corporate address (since 1960!). Apparently inside the officially designated “Birthplace of Silicon Valley” the offices of the founders remain intact.

The Power of Context

Not only are Palo Alto and Stanford University the epicentre of the digital revolution, but California is also an example of the fire-dependent ecosystems on which my ecological sense-making framework is based. The Stanford Faculty Club, where the lectures are held is set in a lush garden. Through the twin double-doors, which were always open during our stay, one can see a pair of coastal redwoods (sequoia sempervirens) soaring above the garden canopy. They provide a wonderful “object lesson” for one of our strategy discussions that contrasts sequoias with banyans:

The strategy of sequoias is analogous to that of the giant enterprises of the industrial era that built large monolithic hierarchies, well-suited to pursuing the economies of scale, although often at the expense of quality. In the U.S. they flourished in the 20th Century until the 1980s when a new social technology – lean manufacturing – changed the trade-off between quantity and quality. Unlike the fire-resistant sequoias these giant industrial bureaucracies did not prove to be sempervirens – everlasting!

The strategy of the banyans, which is native to Pakistan and India (where it is the national tree), is analogous to that of network organizations like Google (Alphabet) and Facebook (Meta) that have been disrupting “legacy” organizations. The banyan is known colloquially as the “strangler fig”. Fruit-eating birds and bats spread its seeds far and wide, and they often fall on the branches and stems of other trees and buildings. Here, over time, they grow to “strangle” their hosts:

A Banyan Tree Growing on a Temple at Angor Wat (Pinterest)

Together with the sequoia, the banyan makes for a graphic metaphorical contrast between two fundamentally different ecological approaches to structure and strategy.

Bildung

Earlier in this post I put “teaching” in quotes because several years ago I realized that I couldn’t teach experienced managers anything in the formal sense of the word. The best I could do was to help them make sense of their experience, to organize and make explicit what they already knew, but didn’t know that they knew.  It is knowledge gained on the far side of experience. This is “education” in the original meaning of the word to “lead forth”, to help the participants recognize the unique value of their experience and the gifts they bring to the world. As such, it is closer to the German concept of bildung and its association with the bildungsroman – a narrative of growth and development in which a person learns the ways of the world and comes to terms with the need for both self-fulfillment and the social roles they must play. Bildung is intrinsically valuable, a process of cultivation, a journey without beginning or end in which people are stretched to their limits to realize their potential.

There is no direct English equivalent of bildung, a reflection, perhaps, of how instrumentally rational the Anglo-American worldview has become, with its preoccupation with techniques and methodologies. In his book, Return to Reason, philosopher Stephen Toulmin argued that ever since the European Enlightenment the concept of reason has been gradually diminished to that of rationality. Reason implies reasonableness and common sense derived from experience. Rationality, on the other hand, has a more formal, logical flavour to it. Reason is situational and context-dependent; rationality is abstract and context-free. Reason’s relevant narratives are always in tension with rationality’s rigorous arguments. According to Toulmin what was the Age of Reason has become the Age of Rationality and we have hardly noticed that it has happened and what has been lost in the process.

The relationship between reason and rationality is clearer in the German distinction between Vernunft (reason) and Verstand (intellect). According to Goethe “Vernunft is concerned with what is becoming…(it) rejoices in whatever evolves; Verstand wants to hold everything still so that it can utilize it.” Here is the tension between change and continuity that so preoccupied Peter Drucker throughout his long career. There is an ethical connotation to Vernunft that is missing from Verstand; reason is concerned with right and wrong, while rationality focuses only on true and false. These differences are echoed in Drucker’s contention that management is always a moral practice, not just a technical one.

Because German thinkers made the separation between reason and rationality so clear, they were also concerned with the complex relationship between the two. Sometimes Vernunft was seen as superior, at other times Verstand was on top. Kant’s view was that the relationship was reciprocal: reason gave something to rationality and rationality unpacked it before handing it back for further processing. Reason contained rationality, giving it a foundation below and a regulatory roof over its head – a “home” in which it could dwell.  I suspect that Toulmin would argue that it is the loss of this dwelling that has resulted in a footloose rationality with imperial ambitions that has done so much damage to organizations, institutions and societies – not because it is “wrong” but because it incomplete and it has been misapplied.

A Sense-making Framework

Hannah Arendt contended that Verstand (intellect) was associated with the search for truth, while Vernunft was all about the quest for meaning and that humans need them both. My Ecology of Organizing course (titled formally as Organizational Behaviour for Decision-making) is all about the making of meaning. As such, it consists of a sense-making framework that uses analogical inquiry, rather than the analytical thinking that pervades MBA courses in general. The ecological framework, based on Canadian ecologist C.S. “Buzz” Holling’s work on the adaptive cycle and the multilevel panarchy frameworks, does not abstract organizations and people from time, space and scale, the key elements of context. Rather, it acts as a theory of context that an inquirer uses as a preliminary screen to help form their expectations, sensitize them to the relevant cues and suggest plausible goals and actions. The framework also acts as a storehouse of models that categorize and methodologies that prescribe, suggesting which ones might be useful and when. I hope that, like the banyan tree, the sense-making framework, while rooted in practice, supplies a philosophical roof over the head of intellect. This is what Goethe contended Vernunft gave to Verstand. It creates for managers a new sense-making narrative that embraces and contains instrumental rationality and keeps it and its related technologies, such as artificial intelligence, in their proper places as servants and not as masters.

The Ecology of Organizing: A Management Course for the 21st Century

For the past six years or so I have been teaching what I call the “ecology of organizing” on masters-level programs at both McGill University in Montreal and the DeGroote School of Business at McMaster University in Ontario. Here is my latest curriculum outline:

This course is a non-traditional one, based on systemic thinking, complexity theory, and a dual-process approach to understanding (embodied) human cognition. The analogies are organic and ecological and the primary polarities are between the logico-scientific and narrative approaches to understanding the process of organizing in complex social systems. Science takes things apart to see how they work, narrative puts things together to see what they mean. The philosophical underpinnings are pragmatic (is it helpful?) rather than positivist (is it true?). As such, the course is often critical of conventional management thinking and constantly questions the nature of the evidence on which managers base (or at least justify) their decisions. It becomes clear that management is not just a technical practice, preoccupied with meeting corporate goals, but also a moral practice concerned with assessing the worthiness of those goals, both for the enterprise and for society. The result is an anticipatory, sense-making framework that allows you to approach organizations as if they were created by people with bodies and intentions, situated in time and space, culture and society, searching for identity and meaning and struggling for credibility and authority. In short, history matters and context matters.

The overall objective is to develop the participants’ capacity to make meaning from their experiences.

Upon completion of this course, participants will be able to:

  • Use multiple perspectives (lenses) to appreciate complex adaptive socio-technical systems and the complex (wicked) problems that can emerge from them.
  • Recognize systems dynamics across multiple levels: the organization, its contexts (industries, markets) and its components (technology, products, teams and individuals).
  • Come away with an ecological framework that allows them to discern the situation in any organization and sort out what kinds of people with what habits and experiences might be able to contribute and what tools and techniques might be helpful.
  • Grapple with the generative tensions between exploitation and exploration, technical problems and adaptive challenges, management and leadership, detachment and immersion, the individual and the group, conflict and cooperation, continuity and change, plumbing and poetry…. and what it takes to navigate among them.
  • Understand the difference between experience-based Naturalistic Decision Making (Recognition-Primed Decision-making) and the Rational Choice (Heuristics and Biases) model. The former, in combination with a sense-making framework, gives one a bearing on where the enterprise is in time, space and scale. This helps form expectations and sensitize one to relevant cues, while suggesting plausible goals and possible actions.
  • View organizations as nests of dynamic cooperative activities that have evolved to handle uncertainty, not as command-and-control machines. From this perspective, strategy, leadership and organizing are all emergent entrepreneurial activities, embracing awareness, insight, discovery, judgement, persuasion, practice and learning.

Social Renewal: The Story of the Quakers and the First Industrial Revolution

“Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained . . . infancy is perpetual. Those who cannot remember the past are condemned to repeat it.” George Santayana

I have just published a lengthy piece in Medium about social renewal and the role of the Quakers in the First Industrial Revolution. It is an extended and enhanced revision of material that first appeared in Chapter 4 of my book, Crisis & Renewal: Meeting the Challenge of Organizational Change (Harvard Business School Press, 1995/2002). It is based on a trip I made to Iron Bridge, Shropshire in the early 1990s.

I take an ecological perspective of enterprises, political, social and commercial. They are conceived in passion, born in communities of trust and practice, grow through the application of reason and mature in power. Here they tend to get stuck, which sets them up for crisis and destruction, but with the possibility of renewal. An ecological framework does notabstract people from time, space and scale, the essential dimensions of context, but places them within the larger social and political narratives. Context matters, history matters and stories matter.

Unless we understand the context in which social renewals take place, we cannot hope to understand what we need to do today to renew our economic, social and political enterprises. The story of the Quakers, their emergence and innovativeness,  growth and success, maturity and decline, is both inspirational and cautionary.

I hope that you find it thought provoking….

Cuttlefish Spurting Out Ink: English and the Projection of Power

An Octopus Squirting Ink

The Guardian reported today that a massive leak from a whistleblower in the private bank, Credit Suisse, had exposed the hidden wealth of clients who are involved in torture, drug trafficking, money laundering, corruption and other crimes.

The bank responded, “Credit Suisse strongly rejects the allegations and inferences about the bank’s purported business practices. The matters presented are predominantly historical, in some cases dating back as far as the 1960s, including at a time where laws, practices and expectations of financial institutions were very different from where they are now…. Furthermore, the accounts of these matters are based on partial, selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct. While Credit Suisse cannot comment on potential client relationships, we can confirm that actions have been taken in line with applicable policies and regulatory requirements at the relevant times, and that related issues have already been addressed.”

This sounds like, “We use to do this, but we don’t do it anymore because the laws have changed.” There is no mention of the morality of their actions.

English as a Two-Tier Language

It’s interesting to note Credit Suisse’s use of the English vocabulary to distance itself from its actions. Ever since the Norman invasion of 1066, English has been a two-tiered language. Before that date everyone spoke Anglo-Saxon, Germanic English. For three hundred years after the Norman conquest of England the nobility and the upper class (court, church and army) spoke French. They were eventually anglicized, and a Latin-based English vocabulary entered the language.

Anglo-Saxon English is the language of intimacy—relationships, emotion, and commitment; we use it predominantly in face-to-face communication. Latin English is the language of distance—formality, thought, and erudition. It is the language of power.

This two-tiered nature of our language explains many curiosities in English. We call farm animals cows, calves, and sheep (from the Germanic Kuh, Kalb, and Schaf) because their herders were Anglo-Saxon. However, we eat beef, veal, and mutton (from the French boeuf, veau, and mouton) because the people who ate them originally were Normans.

The words for the members of the nuclear family—mother, father, sister, brother, son, daughter—are all Germanic, as are the words expressing various relationships: before, after, under, on, in, to, of, for, and. All our swearwords are Germanic in origin, and their popularity seems to stem from their unique ability to express activities of the body. Here are some key contrasts between the two layers of language:

Anglo-Saxon English Latin English
visceral cerebral
profane sacred
monosyllabic polysyllabic
low caste high caste
concrete abstract
action thought

As a result, many things can be said in English using either the Germanic or Romance (Latin English) vocabularies. The plainness and directness of words of Germanic origin are also obvious in business English:

Anglo-Saxon English Latin English
do execute
hire employ
fire terminate
start initiate
drill exercise
skill competence

When executives and corporations are trying to finesse their actions, they often use the Romance version of English because it makes them sound knowledgeable. Skilled professionals, particularly lawyers and doctors, have typically used Latin English to separate themselves from the “common folk.” Surgeons refer to the parts of the body by their Latin anatomical names: this makes for precision in description and also helps distance the surgeon from the person who “owns” the body part. Legal language produces a similar effect by enhancing the dispassionate rationality of the judicial process. Mainstream management academics use it to make themselves seem erudite and sophisticated. It may be the main reason why so much of their writing is unintelligible to management practitioners! Although practitioners in large organizations will find themselves using a higher-flown vocabulary when they communicate ‘upward’ to get resources than when they talk ‘downward’ to get action.

As in the case of Credit Suisse, Latin English can also be used to distance actors from their actions: President Clinton’s lawyer in the Lewinsky affair stated during the Senate impeachment proceedings that his client was prepared to “accept the obloquy” (from the Latin word obloquium, meaning “talk against”) due to him because of his behavior. It sounded almost like an award of some kind! Similarly, the military does not drop bombs but “delivers ordnance”; troops don’t kill women and children but “cause collateral damage.”

George Orwell understood the use of this “inflated” style of language better than anyone, “A mass of Latin words falls upon the facts like soft snow, blurring the outline and covering up all the details. The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.” (Politics and the English Language 1945/46)