Predictability and Organisations

Yesterday, I was struck by an article in the Business Section of the Sunday Times with this heading: Directors told to predict future under new code. That I should be struck by such a heading is, of course, hardly surprising since I have been publishing books and papers for the last 24 years arguing that it is impossible to predict the outcomes of the actions  people undertake in organisations. Indeed, the paradox of predictable unpredictability of human actions is central to the theory of complex responsive processes. The fundamental reason for this paradox is that that we are interdependent individuals, not autonomous individuals. This means that every choice any one of us makes, any intention any one of us forms and every action any one of us undertakes cannot produce some direct outcome all on its own because everyone around us, indeed many at some distance from us, are also choosing, intending and acting so that what happens is the consequence of the interplay of all our choices, intentions and actions. The models of the complexity sciences also display the unpredictability of outcomes because nonlinear relationship can escalate tiny changes to produce completely unpredictable long term outcomes. Indeed, some of the models, for example, those of far-from-equilibrium thermodynamics, lead to the conclusion that the universe is fundamentally unpredictable. And, in fact, our own experience confirms these conclusions about unpredictability.

 

In view of all of this it is amazing how prominent leaders in the organisational world carry any giving out predictions which, of course, are never realised. Take for example the Governor of the Bank of England. A year ago now, Mark Carney took up his post as Governor of the Bank of England after some years as Governor of the Bank of Canada. The first really headline-grabbing action he took was to provide what he called ‘forward guidance’ to the financial markets. He would only raise interest rates if the unemployment rate fell below 7% and he said that this would not happen before 2016. The market did not believe him and began to price in an interest rate increase in 2015. Only a few months later it became clear that unemployment was falling much faster than expected and would probably reach that target by the end of 2013. So the Governor hastily abandoned this target and proposed to use a number of indicators of economic ‘slack’. Just as well because the unemployment rate in May this year fell to 6.6%. What is interesting is how, after it became crystal clear that neither he nor anyone else could predict any economic indicator, he rushed from one failed prediction to others just as likely to fail. He does not seem to have reached the sensible conclusion, which is to abandon all of these useless attempts to predict. Then in his most recent speech he let slip that the interest rate rise could well come in a few months’ time. Why do senior people keep making claims for the future which experience would tell them are futile?

 

Now back to the newspaper article which tells a similar story. The Financial Reporting Council (FRC) commissioned the Liberal Democrat peer and former chairman of the insurer Aviva, Lord Sharman, to lead an expert panel to revamp the going concern test for organisations since the current test had failed to pick up the vulnerability of the banks in 2008. After months of deliberation and a number of rounds of consultation they produced their recommendation of a new corporate governance code for one last round of consultation. They will recommend that Directors be required to tell investors how long they think their company will remain viable: they must declare that their companies are viable for the foreseeable future and the foreseeable future has to exceed 12 months. So a group of eminent people spend months, and no doubt a lot of money, to come up with a recommendation which simplistically assumes that the future is predictable when in our experience it clearly is not. Even more interesting is the response of investors and trade bodies. For example, John Moulton, the veteran venture capitalist who runs Better Capital, said: ‘It is madness. No company will be able to come up with the right answer’. The panel says they will consider this point. So the great and the good continue to formulate policies on the basis of some very dodgy assumptions, which they never reflect upon, while those they are trying to protect make clear their knowledge that such protection is impossible. It looks like some who make a great deal of money do not operate on outdated assumptions.

 

Why are we so caught in a way of thinking that denies our experience? I think it is because the great and the good constitute a ‘thought collective’ in the terms of Ludwik Flek. In a previous blog I talked about Flek’s conclusion that we all belong to some thought collective and each of these collectives is characterised by a thought style. To question such a thought style is to risk exclusion from the thought collective. And it is not just policy makers and leaders of large organisations who are trapped in a ‘thought collective’. Some of the most effectively policed thought collectives are to found in academia where journals control what can be published and business schools continue to teach students all kinds of misleading ideas about predictability and the use of tools and techniques.

Reflexive OD

Previous blogs have outlined key features of the theory of complex responsive processes of relating between members of organisations as a way of making more sense of what we actually do in our everyday lives in those organisations. This theory makes a number of claims.

The first is that change across whole organisations is not caused by grand designs rolled down a hierarchy. Rather changes in the patterns of relationship between a whole population of people, which is what an organisation is, emerge across that population in the interplay of many, many local interactions.

A further claim is that all local interactions in all organisations and economies in all countries reflect the same fundamental processes. First, local interactions are always conversational in nature – societies and organizations are ongoing conversation which is always reflecting the generalized other, the habitus, the game, the social background, the culture. Organisational change then means change in the patterning of conversation arising in local interaction. Secondly this social activity of gesture and response always reflects power figuration which, together with ideologies, are the basis of the inevitable dynamic of inclusion and exclusion. In other words, organisational life is processes of ordinary everyday politics in which we are always making ideologically based choices and decisions. Taking all of these processes together we can see how organisational life is both competitive and cooperative, both conflictual and consensual. The inevitable conflict will always be a reflection of the fact that as agents in organisational life we are always different to each other and at the same time we are the same as each other.

No matter what our role in an organisations is, whether leader, manager or staff member, we are all participating in all the process described above.  This must also apply to the role of OD consultant. As OD consultants we enter into the conversational life of an organisation and we take up power positions which may well threaten the pattern of power relations for some, or we may find ourselves reinforcing current power relations, leading us to sustain stability while proclaiming that we are change agents. We inevitably find ourselves included in some groupings and excluded from others and our ways of participating are inevitably reflections of the particular ideologies we believe in. The invitation from the theory of complex responsive processes to OD practitioners is to refocus attention from an exclusive concern with tools and techniques to a focus which pays much more attention to the actual processes that people, including OD practitioners, are engaged in.

Since the theory of complex responsive processes is offering an explanation of what we are already doing it is not prescriptive and so does not yield much in the way of tools and techniques of OD practice. It does not deal with what we should be doing as OD practitioners but offers instead a refocusing of attention in reflecting upon and thinking about what we are actually doing together now rather than focusing attention on idealised futures and so called tools and techniques, the success of which is assumed rather than supported by evidence.  Instead, I am assuming, also without anything like scientific evidence, that this refocusing of attention will yield greater understanding of what is going on and that this greater understanding will be expressed in changes of practice. Such changes cannot be predicted in advance nor is there any guarantee that the changes will yield any improvement. I believe, however, that on the whole it must be better to approach organisational life in a more rather than a less thoughtful way. So the ‘prescription’ that emerges from the theory of complex responsive processes is the invitation to take a more reflexive position in thinking about what we are doing and the practical judgment we must rely on in conditions of uncertainty.

By reflexivity I mean processes that amount to more than reflection. We may think of this reflexivity-in-action as the principle ‘technique’ for developing practical judgement.

To reflect means to think deeply about a subject and some synonyms are to ponder, ruminate, contemplate, or speculate. Reflection is the intellectual and emotional exercise of the mind to reason, give careful consideration to something, make inferences, decisions, and find solutions. Reflection can be directed at one’s own experience, as in introspection, which is the activity of reflecting on one’s own thoughts and feelings and forming beliefs about one’s own mental states. What, then, does it mean to practice reflexivity? A reflexive pronoun is the object in a sentence indicating that the object is the same as the subject in that sentence. The subject and the object are then not separate but are simultaneously present. For example I might say that ‘I was washing myself’ so that the reflexive pronoun ‘myself’ bends back to the ‘I’. This reflexivity should not be understood as introspection since reflexivity involves much more than introspection and the form of reflexivity that I want to point to in this chapter needs to be distinguished from both reflection and from introspection. Reflexivity points to the impossibility of standing outside of our experience and observing it, simply because it is we who are participating in and creating the experience, always with others. Reflexivity is the activity of noticing and thinking about the nature of our involvement in our participation with each other as we do something together. So, I am using a notion of reflexivity which can only be social. Since we are interdependent individuals, reflexivity must involve thinking about how we and others involved with us are interacting and this will involve noticing and thinking about our history together and more widely about the history of the wider communities we are part of.

The ability to take a reflexive stance is the basis of practical judgment, which is an understanding of group interaction – the expert manager is one who has developed the ability to notice more aspects of group dynamics than others do and a greater ability to make sense of those aspects. What is called for, then, is the practice of narrative forms of inquiry because it is in the detail of the narrative that we find ourselves participating in that we can express the themes emerging in our experience, as well as the details of context, that enable us to form judgments on what is going on and what we might do as the next step. The ‘technique’ of narrative inquiry involves leaders, managers and members of an organization exploring together the history of the situation they find themselves in, trying to identify how they have together created this situation.  Here ‘technique’ requires self-discipline on the part of all in engaging in a mode of inquiry that cannot be ‘controlled’. The ‘technique’ involves scrapping the bullet points and turning instead to narratives that provoke further reflection. What I am proposing, therefore, is that the capacity for practical judgment in organisations can be sustained and developed by the ‘technique’ of reflexive inquiry into the narrative of what we are doing together in ambiguous and uncertain situations. For leaders and managers, in practical terms, this means consciously creating opportunities for groups of colleagues and others to engage in the kind of inquiry that I have been describing. I would call this reflexive OD practice.

An OD practitioner who is an expert at working in reflexive ways may assist clients to greater awareness of their roles in the organization. Consultants who work in a reflexive way with groups of leaders and managers may help to widen and deepen communication in a group and so produce greater meaning. This activity cannot be reduced to rules and procedures. The work in the development of more fluid and complex conversation involves curbing the widespread pattern in organizations where leaders and managers focus on the future and move immediately to planning and solving problems.  This can be done by exploring narratives of what those in the group have done in the past in order to develop some insight into what they have been doing and why they have been doing it in a particular way. Such conversation grounds group members in the present as they make sense of the past in the present and opens up more varied and grounded ways of taking account of the future in the present. A reflexive form focuses on narrative. It is very helpful for leaders and managers to write short narratives of troubling events they are currently experiencing and then inquire into these narratives in the group. Such activities develop thinking and lead to greater insight into what is going on.

 

 

 

Trust in Organisations

A search of Google Scholar indicates that books and journal papers to do with trust, organisations and leadership numbered a few hundred per annum during the 1960s, jumping to the low thousands during the 1970s, and approaching 10,000 per annum in the 1990s. During the early years of this century the number of publications has numbered around an average of 40,000 per year. These numbers indicate a major increase in, and concern about, the presence and role of trust in organisational life, including the exercise of leadership. In this note I want to give a brief indication of how this issue is approached in the management literature and how it is approached in the sociology literature. To aid in the comparing and contrasting I will draw on Hosmer’s[i] classification of four different approaches to understanding trust:

  • Trust as an optimistic individual expectation, focusing on expectations that others will perform in competent and morally correct ways.
  • Trust as an interpersonal relation, focusing on the dependence of the trustors on the trustees to respect the trustors’ interests. The relationship is one of vulnerability for the trustor.
  • Trust as a rational decision to  do with protecting one’s interests made after risk analysis or a calculation in terms of economic transactions costs (which I will not cover in this note).
  • Trust and social structure. Continue reading “Trust in Organisations”

Repetitive Patterns of Communication: Thought Collectives and Thought Styles

There seems to me to be an interesting pattern in the comments on many of the blogs on this site, a pattern that I frequently encounter in many other discussions in organizations too. The pattern takes the following form.

On this site, and in most of our work encounters, colleagues and I are seeking to present a way of thinking about organizational life which departs radically from the mainstream or dominant discourse. We want to do this because we take the view that dominant ways of understanding organizations have failed to account for the glaringly obvious inability of leaders and managers to determine their futures, which the dominant discourse argues is what they are there for. The alternative way of thinking we are trying to articulate involves moving completely away from thinking of human interaction as constituting, or as if constituting, a system of any kind which it is then the role of leaders and managers to control. Any/every form of systems thinking is conducted in terms of spatial metaphors with parts forming wholes within boundaries. We argue against this way of thinking about human interaction / organizations because the spatial metaphor of systems abstracts from direct experience by positing an entity outside our relationships with each which is then easily reified and anthropomorphised. Systemic ways of thinking lead to separation in thought of individual and group and locates them at different levels, another spatial metaphor. We are articulating an alternative way of thinking which avoids abstracting completely from our experience and focuses our attention on the temporal responsive processes of our in interacting with each other as we deal with uncertainty and our inability to control. We argue that this complex responsive processes way of thinking is incompatible with systems thinking because in the former we are seeking to understand our experience from within our participation in that experience and in the latter people are seeking to observe and manipulate something outside of themselves. Moving from one of these ways of thinking to the other has important implications for what we do and how we think about what we do to deal with not knowing and it is this that we are seeking to inquire into.

One common response to the position we take is for a commenter to welcome what we are saying but then they go on to agree that some forms of systems thinking exhibit the drawbacks we identify (for example, first order systems) but that there are other forms (for example, second order  systems) that do not display these drawbacks. While agreeing then, the commenters present their own brand of system thinking as an exception, usually without explaining why it is an exception. The commenter may then proceed to talk about people drawing boundaries around their experience. In other words the commenter simply proceeds to rearticulate the dominant discourse without acknowledging any of our arguments against it.

Another commenter may then return to the message of the blog and point out that defining the boundaries of an organization involves us thinking of an organization as some kind of system that exists outside of us and that when we do this we are moving more and from our own actual experience of what is happening around us in the conversations we are engaged in. In other words the second commenter repeats the argument being presented in the blog.

The first commenter may then reply that the ability to see multiple, non-contradictory boundaries, or containers, is essential to making meaning and taking action; useful boundaries can be created and transcended at will. Here then, we are into the second repetition of a reply which simply repeats once again the basic tenets of the dominant discourse without engaging the argument.

And so the ‘ping pong’ goes on. The pattern is one of a commenter presenting the argument of the responsive processes view which elicits a rearticulating of the dominant discourse of systems thinking which calls forth another comment now simply repeating the responsive processes position which evokes a comment simply repeating the systems position. We are together co-creating repetitive patterns which are rather stuck and which block inquiring into the argument. This is a pattern which I frequently encounter in other forums too and I notice that leaders and managers in organizations  also often get stuck in repetitive patterns of this kind. So how are we to make sense of this kind of pattern that we so often co-create in which we each make claims about reality and the facts but do not really argue them through? I think a very useful way of understanding what we are getting into together is provided by an important book called Genesis and Development of a Scientific Fact by Ludwik Fleck which was published in 1935.

In the years leading up to the publication of his book, Fleck, a bacteriologist approaching the age of 40, had acquired a considerable reputation as a scientist for his research in the areas of the serology of typhus, syphilis and a variety of pathogenic microorganisms. Fleck starts his book with a question: What is a fact? In answering this question, he goes on to say:

A fact is supposed to be distinguished from transient theories as something definite, permanent, and independent of any subjective interpretation by the scientist. … Epistemology often commits a fundamental error: almost exclusively it regards well-established facts of everyday life, or those of classical physics, as the only ones that are reliable … [this] is inherently naïve … [as a consequence] we feel a complete passivity in the face of a power that is independent of us; a power we call “existence” or “reality”.[i]

He is arguing that in taking the common sense view of what a fact is we lose sight of our own role, collectively and historically, in constructing a fact and developing a fact and this leads us to regarding a fact as simply something we have no alternative but to accept: it cannot be questioned. The purpose of Fleck’s book is to take a particular medical fact, namely syphilis, and explore how such an empirical fact originated, how it has evolved and what it consists of. He shows how before the end of the 15th century syphilis was not differentiated from other skin diseases such as scabies. It was not an independent fact. Around the end of the 15th century syphilis was identified as a new disease, labelled ‘carnal scourge’, which had arisen because of the conjunction of Saturn and Jupiter under the sign of Scorpio which rules the genitals. Added to the astrological explanation was the religious one that the disease was god’s punishment of sinful lust. Syphilis was now the fact of carnal scourge. Fleck argues that any explanation of a phenomenon, including this one, can only survive and develop if it is ‘stylized in conformity with the prevailing thought style’[ii] and that it took centuries before developments in other sciences led to different ways of thinking about the disease. He concludes that:

Such entrenchment of thought proves that it was not the so-called empirical observations that led to the construction and fixation of the idea. Instead, special factors of deep psychological and traditional significance greatly contributed to it.[iii]

Continue reading “Repetitive Patterns of Communication: Thought Collectives and Thought Styles”

The Paradox of Consensus and Conflict in Organisational Life

Today’s dominant thought collective[i] of practitioners, consultants and academics concerned with leadership, management and other organisational matters is characterised by thought styles[ii] which, in a completely taken-for-granted way, equate success with positives, sharing, harmony and consensus. Leaders are called upon to communicate inspiring, compelling visions of desirable futures shorn of all problematic features. Followers are to be converted to sharing the vision and committing to the mission so that everyone ‘is on the same page’, ‘singing from the same hymn sheet’, ‘climbing on board’, ‘on the message’ and ‘a team player’. This whole raft of idealisations is taken even further when it is accompanied by a relentless emphasis on the positive aspects of all situations. There seems to be a scarcely-concealed dread of ‘negatives’, such as conflict, and a half-expressed conviction that success can only be achieved when all share the same view, with breakdown as the consequence  of not doing this. If conflict is noticed it is immediately followed by calls for the practice of ‘conflict resolution’ or approaches which rapidly move people from anything negative to a focus on the ‘positives’. A popular example of the prescription for positive consensus is provided by Appreciative Inquiry. Proponents[iii] of Appreciative Inquiry (AI) point to how the dominant approach to leading, managing and changing organisations focuses attention on problems, deficits and dysfunctions. They argue that this approach is demoralising and ineffective in bringing about change and call, instead, for a focus on opportunities and what is working because focusing in this appreciative, positive way raises  morale and promotes generative inquiry. It is claimed that AI generates spontaneous, transformational action on the part of individuals, groups and organisations which leads to a better future. Critics[iv] of AI problematise the focus on positiveness, arguing that positive and negative feelings are intimately connected and conclude that AI is a method whose proponents show little self-reflection or evaluative critique of what they are proposing. In response, Gervase Bushe of the Segal Graduate School of Business has published a paper titles ‘Appreciative Inquiry Is Not (Just) About the Positive’.[v]  Bushe agrees that AI can become a form of repression when it suppresses dissent and focuses on the positive as a defence against the anxiety of dealing with reality. However, he then immediately goes on to say that when AI is used in appropriate ways, which he does not identify, then people do not wallow in mutual pain but tell each other uplifting stories instead, which sooth tensions and release energy. Instead of focusing on conflict, bridges are built between conflicting groups.  In his view, people who want to talk about what they do not like should not be stopped from doing so but they should not be asked to elaborate on these matters. They should be encouraged, instead, to talk about what is missing, what they want more of and what their image of their organisation ought to be. He talks about small group meetings where everyone reads the same story together. Much the same points can be made another positiveness movement called Positive Deviance which is basically an idealised form to ‘benchmarking’ and a sanitisation of ‘deviance’.

This unrelenting emphasis on the positive, on harmony and consensus functions to cover over conflict, difference and real-life attitudes towards deviants because to bring these matters out into the open is to reveal patterns of power relations,  the dynamics of identity-forming inclusion and exclusion and the ideologies sustaining current power figurations. As a consequence, public discussions of organisational life take the form of a kind of rational, positive fantasy that focuses our attention on only a small part of what we ordinarily experience in our daily organisational lives. People continue, as they always have done, to disagree and subvert what they disagree: organisational life is characterised by ongoing conflict in which, at the same time, people normally manage to achieve sufficient degrees of consensus, tolerance and cooperation to get things done together. In order to understand what we are ordinarily engaged in during the course of our daily organisational lives we need to avoid thinking in terms of a duality of consensus and conflict, where we can decide to move from the one to the other, and think instead in terms of the paradox of consensus and conflict: we engage in, we are heavily invested in, organisational games displaying the paradoxical dynamics of consensual conflict or conflictual consensus. Continue reading “The Paradox of Consensus and Conflict in Organisational Life”

Responding to Complexity and Uncertainty: The Agile Organisation

Over the past two decades, management consultants and academics at business schools have increasingly stressed what they view as the rapidly increasing levels of complexity and uncertainty in the environment that all organisations have to respond to and many have labelled these conditions ‘ hyper-competition’ or ‘high velocity competition’. To deal with these conditions, consultants and academics have called for organisations to become ‘agile organisations’. The ‘agile organisation’ is also described as ‘the entrepreneurial organisation’ and ‘the resilient organisation’ and the hallmarks of this kind of organisation are its high speed of response to change and its focus on the customer which calls for customized  rather than standardised offerings. The notion of the agile organisation therefore originates in the discipline of strategic management with its concern for competitive advantage; in manufacturing production systems such as Total Quality Management, Just in Time, Lean and six sigma with their concern for high quality, customized batch manufacturing; and also in Agile Software development and its concern for teams and partnerships with customers. In short, the concept of agile processes was initially primarily concerned with product manufacturing and software development and from these areas it has come to be simply applied to all other organisations including both private and public sector service providers, without much reflection on whether this is appropriate or not. So when did these developments occur and how widespread are they?

 A quick search of Google Scholar reveals that over the decade ending in 1993 there were 56 journal papers which referred to the agile organisation at some point and over the same period some 14 referred to hyper-competition while no papers referred to the resilient organisation but over 20,000 used the term ‘complexity’.  Over the rest of that decade the number referring to agile organisations rose to 442 and the number referring to hyper-competition rose to 416 while 43 referred to the resilient organisation and there were some 19,000 references to complexity. Over the first decade of this century, there were nearly 5,000 referrals to the agile organisation, about 3,500 to hyper-competition, 385 to the resilient organisation and some 40,000 to complexity. Interest in agile and resilient organisations facing hyper-competition, uncertainty and complexity is, therefore, very recent and even now not all that widespread. Despite recognizing complexity and uncertainty, however, the prescription is overwhelmingly for managers to design organisations that can successfully deal with the supposedly ‘new’ conditions. There is very little radical reflection on what the recognition of uncertainty and complexity, which has always characterized the conditions which members of organisations have to act into, means for the possibility of designing organisation in the first place. There is very little inquiry into how members of organisations have always dealt with uncertainty and complexity. This is, perhaps, not a surprising observation when one takes account of the strength of management and leadership thought collectives and the thought styles that they perpetuate. This post reviews notions of organisational agility and resilience as responses to rapidly rising complexity and uncertainty. Continue reading “Responding to Complexity and Uncertainty: The Agile Organisation”

Further thoughts on the tools and techniques of leadership and management

In this blog I hope to develop some of the points made in previous blogs on the tools and techniques of management. What is generally meant by the term ‘tools and techniques of leadership and management’ is ways of applying instrumental rationality to solve problems and control outcomes. In fact, in an ambiguous and uncertain world none of these tools and techniques can do what is claimed for them but they do constitute the techniques of disciplinary power which enable leaders and managers to control the bodies and bodily activities of
people in the organization. All of these tools and techniques take the form of rules, procedures and models. However, there is a difference between competent performance, on the one hand, and proficient, expert performance, on the other.
The difference is that following rules, procedures and models may produce competent performance, but proficient, expert performance requires moving beyond the rules, procedures and models. Management tools and techniques of
instrumental rationality may promote competence but the development of expertise is beyond them. Experts are unable to articulate the rules governing their performance because they simply do not follow rules; instead, as a consequence of long experience, they exercise practical judgment in the unique situations they find themselves in. Through experience they are able to recognize patterns, distinguishing between similarities with other situations and unique differences. The patterns they recognize are the emerging patterns of interaction that they and other people are creating. In other words, they are recognizing the emerging themes in conversation, power relations and ideology reflecting choices. The key resource any organization must rely on is surely this expert interactive capacity in the exercise of practical judgment
by leaders and managers. If we cannot identify rules, procedures and models  as ‘drivers’ of expert practical judgment, does it follow that we can say nothing about practical judgment and have to leave it as a mystery?

I do not think there is anything mysterious about the exercise of practical judgment and we can inquire into the exercise of practical judgment and explore whether it is possible to identify any ‘techniques’ of practical judgment. Continue reading “Further thoughts on the tools and techniques of leadership and management”