The growth of new technologies and new levels of has led to new organisational capabilities. With these new capabilities has come greater levels of complexity and inter-dependence, which in turn lead to unpredicted and unpredictable areas of brittleness / lack of resilience.
Combine these factors with an increasingly complex world and there can be unpredicted failures and outages. Examples include the impact of ransomware such as Wannacry.
Coins phrase strategic agility gap to describe the difference at which an organisation adapts / can adapt to change and the rise of new and unexpected challenges at larger scale.
Exponential growth of problems
Generally organisations are faster to adapt new capabilities than they are to adapt to the risks those capabilities bring e.g. reliance on automated trading and examples of exponential failure: 2
- small problems interact and cascade in surprising ways
- speed and complexity overwhelms human ability to diagnose the issue
- delays in authorisation to make changes can compound delays
- delays and need for co-ordination have compounding impact
- organisation structures can slow responses to the point where they cannot keep up
Examples of success
Counter-examples of organisations that have prepared to deal with unpredicatble events, e.g. extreme weather. 3
- re-prioritisation against conflicting goals
- understand which processes (e.g. cost control) can and must be set aside to deal with imminent threats
- place a value on timely decision-making
- embed horizontal co-ordination with minimal bureaucracy
- enable decisions at lowest possible level of hierarchy
Managing the messiness of systems
Systems are messy. Finite resources contrast with a changing environment, therefore all plans are inherently unable to adapt to all possible circumstances.
Organisations as adaptive systems. Success and growth from adopting new capabilities accelerates the further adoption of those or enhanced capabilities. As a consequence the complexity grows, and therefore the gamut of possible issues grows so the strategic ability gap is unavoidable.
To manage these scenarios organisations must develop capabilities to continuously adapt.
Key factors identified:
- encourage initiative but ensure the results of initiative are synchronised across roles - need a balance
- stimulate and recognise/reward reciprocity4 between different organisation units (e.g. commitment to mutual assistance). Know when to relax targets or compliance requirements in the interests of the wider organisation.
- recognise that unpleasant surprises are an opportunity to learn
- proactively learn from those nasty surprises and adapt systems, procedures & practices, training etc.
Deary, D. S., Walker, K. E. & Woods, D. D. (2013). Resilience in the Face of a Superstorm: A Transportation Firm Confronts Hurricane Sandy. In Proceedings of the Human Factors and Ergonomics Society, 57th Annual Meeting (pp. 329-333). Santa Monica, CA: Human Factors and Ergonomics Society ↩︎
Ostrom, E. (2003). Toward a Behavioral Theory Linking Trust, Reciprocity, and Reputation. In E. Ostrom & J. Walker (Eds.), Trust and Reciprocity: Interdisciplinary Lessons from Experimental Research. Russell Sage Foundation, NY. ↩︎