Firefighting

An unconventional approach to designing organisations that respond and adapt to uncertainty.

Hello from muggy, torrid Singapore.

This week, for #reasons, I’m reflecting on how teams and organisations that are exposed to rapid, unpredictable change are spectacularly poorly served by conventional organisation design. I offer some heterodox suggestions for building organisations that are intentionally uncertain/unstable in ways that let them respond/adapt to unpredictable and rapid change.

But first, a vernacular noodle interlude.

I’ve been here for nearly two weeks but, for #reasons, I’ve not been free any weekday midmornings — and some of the foods I have my eye on sell out by late mornings. Next week, things will change, and the first thing I will seek is a particularly superb vendor of bak chor mee in the northwest. Meanwhile, here’s a tantalising 2015 photo of his product. As I wrote back then, “it is not only the ramen otaku and the italian grandmother who can produce noodles of precise texture and refined flavour combination.”

This rendition of bak chor mee is a handful of flat alkaline noodles precisely cooked and drained, then dressed with Jinjiang vinegar, lard, chili paste, soy-braised mushrooms, poached ground pork, poached pig liver, sliced fishcake, pork balls and fishballs, and lettuce. A small bowl of pork poaching liquid as a broth on the side.

Firefighting.

Imagine that you lead a large organisation operating in an industry that is relatively stable — it could be a big corporation or a government agency or a not-for-profit. The underlying technology is changing slowly and incrementally. Business models are pretty well-understood. There aren’t lots of pesky disruptive startups underfoot. Strategy in this space might reasonably have a decade time-horizon. Teams understand what they have to do; their tasks and KPIs don’t change too much.

I don’t know many people who truly live this beautiful dream.

The reality for leaders today is that they confront unpredictable and rapid change. This can come from new business models, technology change, crazy weather, war, new regulation, alien spacecraft, pandemics, generational changes in work preferences — the list goes on and on.

Conventional or default ways of designing organisations just don’t work for unpredictable, rapid change. Some examples: Job roles that aren’t explicitly open-ended, organisational reporting structures that robustly crystallise current priorities and resource allocations, intensive strategy-setting that takes ages and produces strategy that’s expected to last for even longer, setting and focusing on highly legible KPIs as goals, implicitly setting expectations of stability in internal and external messaging.

Teams and organisations designed this way experience unpredictable rapid change like firefighters experience a big wildfire they were not prepared for — a world that at first made sense falls apart and seems impossible to put together again. Should it really surprise us that employees can’t adapt to learning and doing new kinds of work if their roles have no flexibility baked into them? Or that teams are stressed to breaking point because their reporting hierarchy and resourcing no longer matches the demands of the new environment (but their KPIs have no flexibility to change)? Or that laboriously constructed strategy needs to be torn up more quickly than it can be regenerated?

Fortunately, in most organisations, only some parts are unavoidably confronted with the uncertainty of unpredictable, rapid change. For those parts, organisation design has to be unconventional. The general idea is to design uncertainty-exposed parts of the organisation to be brittle in a good way — i.e., more likely to break quickly when the environment changes, and more likely to be able to repair themselves to adapt to the change.

Here is a non-exhaustive list of design “principles“ for doing this:

1. Embed responsiveness (instead of rigidity) in structure. When forming teams, default to planned death instead of assumed permanence. For instance, form project teams that are designed and expected to finish their work in a year and disappear. Evaluate them nine months in and persist them for another year if there’s a good reason to do so.

2. Fight the urge to have overly legible, high-priority KPIs. Creating very legible, very high priority KPIs without clarifying what tradeoffs are acceptable/unacceptable nearly always leads to proxy failure (= metrics becoming bad measures when they become targets.) Relying on legible concrete KPIs is much easier than articulating ways of recognising successful outcomes and converging on the acceptable/unacceptable tradeoffs involved — but the latter enables much greater autonomy and discretion for teams within the organisation.

3. Be explicit about horizons and knowability. When communicating strategy both upward and downward, be explicit about a) how fast the strategic environment is changing, b) how certain the environment is, c) the broad strategy time horizon, d) how often the broad strategy will be updated, and e) the sensing mechanisms for making those strategic updates.

4. Motivate long-term strategy by articulating tradeoffs instead of setting legible concrete KPIs. Be clear about the difference between concrete KPIs (only suitable for short term alignment) and more abstract success criteria that articulate acceptable and unacceptable tradeoffs (suitable for the longer term). Learning how to articulate these more abstract criteria is hard — I recommend Boris as a structured process for articulating goals and their associated tradeoffs.

5. Introduce intentional and explicit open-endedness into employee roles. Roles that are explicitly open-ended provide space and motivation for continual adaptive role evolution. They also set employees’ expectations that roles will change, which helps reduce the trauma of the inevitable.

These design principles lead to an organisation that isn’t stable — roles keep changing, teams appear and disappear, strategy updates frequently (though mostly on the margins), KPIs change often. The important thing is that the organisation and the people in it didn’t expect stability. That’s the price of an organisation that’s able to respond and adapt because it has itself become changeable at a similar timescale to the changes in the environment it has to respond to.

If there’s a metaphor for this approach to organising for uncertainty, it would probably be fighting fire with fire.

Also relevant: Two earlier essays I wrote on why the work of uncertainty will be persistently valuable because it is so difficult, and how to introduce strange and uncomfortable things into large, slow-moving organisations.

See you soon,

VT