Visionjuice - The edge of chaos and strategy

Visionjuice - facilitation and coaching in personal and organisational change

Leading organisations at the edge of chaos is different to traditional views of leadership. Most organisations are at the edge of chaos for some or all of the time.

The edge of chaos

The chart below is adapted from the work of Ralph Stacey. It has two axes. One looks at how certain we feel about the external environment, where it is going and where we fit in with that. The other looks at how much agreement there is about how we do things together.

In the bottom left hand corner we are certain about the external environment – what will happen in the world when we pull certain levers – and we agree on how we organise together, where we are and where we are going – we agree what levers to pull. In some ways this is where organisations used to sit in the mythical good old days. We knew what we were doing back then. It is for organisations in this area that Taylorism and rational, scientific management were invented. My personal view is that they very rarely existed except as models but that’s another story.
Further up the chart we still have certainty about the external environment but we move away from agreement and different people or different parts of the organisation have different views about how we do things and where we are heading. In this world we make decisions through politics, compromise and negotiation.
This third area is an area where we are not so clear about the external environment but we have high levels of agreement about what we stand for. In this world control is based on ideology and decisions are judgemental, clear and directive. This area is typified by a clear vision that gives you the courage to act in uncertain times, rather than as a result of specific knowledge.

Traditional business school teaching and thinking is based in the bottom left hand corner. Most things you have read about business will have assumed that you sit there. You don’t.
When we move a long way away from certainty and agreement we move into this area of chaos in the top right hand corner. This is not a great place to be.

When an organisation slips into chaos what you will see is people ignoring the big picture and focussing on trivial details. When people feel anxious, disempowered or out of control they put their attention on what they can understand. In any organisation where you see petty bureaucracy and a focus on the trivia you can be pretty sure that the people in that organisation feel that they have no ability to control its direction or even the important stuff in their immediate world. People don’t count the paperclips or insist on forms in triplicate because they are bad people. They do it because it’s one area of their world where they can exercise control. The trouble is that for an organisation, death by chaos can be a long slow process. Organisations, particularly large ones, can survive for a very, very long time in a state of chaos with no ability to control anything of any significance and yet without actually dying. Just look at most government departments.
The area in the middle of the chart is the area of complexity, or what Stacey calls ‘the edge of chaos’. This is the dynamic within which most organisations actually exist, at least for part of the time. It is, however, the area where traditional management school thinking, which assumes that everything happens in a linear fashion and can be controlled, is useless.

This zone has the potential for intense creativity and, for those organisations that are comfortable working with these dynamics, it can be a source of huge success. Indeed pretty much all creativity happens in complexity.

Successful inhabitation of the ‘edge of chaos’ is characterised by three key factors:
- strong networks of people in healthy communication with each other
- a willingness to work with differences between people
- an ability to allow ideas and solutions to ‘emerge’ from interactions rather than by imposition
These factors help people to live with, indeed respond creatively to the comparative instability. The role of the leader is to provide enough security to enable people to work effectively together, while giving space for emergence of the new. The leader is paradoxically both in control, and not in control. As Thomas Crum put it, ‘instead of having the rug pulled from under your feet, learn to dance on a shifting carpet’.

The leader must create environments for working in which the fear that can be caused by the relative instability is minimised, and a sense of possibility and potential is maximised. These environments Stacey calls islands of bounded instability. This can be seen as providing protection from the instability and uncertainty of the world. Leaders can do this through fostering trust (“We feel OK because we trust them”), through the way they are (“We feel OK because of the example set by the leader”) even through strategy (“We feel OK because we feel we know where we’re going”).

Daniel Goleman in his talk at Exeter University on 21st September 2007 referred to the importance of a secure base and said that parents, teachers and leaders could all provide this base. There are obvious similarities between this secure base and the islands of bounded instability.

At the edge of chaos leadership is delivered through simple rules rather than command and control. It is impossible for the leader to know the detail of what’s going on so they have to trust their people to deliver. This trust is bounded by having a few (a very few) simple rules that the organisation works to.

Strategic planning in a complex world isn’t done because we believe that the strategy will happen. It is done because the strategies and plans give us the courage to act into an uncertain future and also give us a position from which to negotiate with those who hold the resources we’ll need for the future.

Strategy

Strategy can allow or prevent organisational creativity.

Giving direction through a clear strategy is one of the fundamental roles of leadership. As I said above this need not be because you believe that the strategic plan will ever happen, as planned, but is to give you the courage to act into the future and also a basis for negotiation with resource holders.

There are entire volumes written about strategy. Here’s my take.

Strategy is most effective if it is developed backwards through time, not forwards. If you start where you are and plan incrementally then you will have a perfectly rational, absolutely achievable, tactical and operational plan. You will not have a strategy. If you start with what you want to achieve in the long term and then work backwards with the question, ‘What needs to be in place to allow this to happen’ then you have a chance of developing a strategy with stretch and the possibility of really making a difference.

An organisation with strategies developed forward through time cannot be creative except at the margin and by accident. An organisation with strategies developed backwards through time is far more likely to be creative.

The first thing is to know where you are heading; to have something that you stand for and a star to steer towards. This is the vision (and possibly the values). This should be a long term, meaningful aspiration. You might have a separate mission which would be a less all encompassing view of where you are heading. From this you develop a small set of goals. These should be clear, concise, measurable (at least notionally), have a definite timescale (usually five or more years) and should be discardable once the goal is achieved. Supporting each goal will be a more specific plan or strategic programme that will explain how the goal is made to happen. From the goals you can then develop a business plan. This will typically cover a three year timescale and will be getting quite specific. At this stage you will be attaching people to the plan and assigning individual responsibilities. From the business plan you will be able to write your next year’s budget. And if all of this seems like overkill then stick to the star in the future and the steps back from it that say, “what do we need to have in place to make this happen?”.

So, since the vision is critical, how do you get people to buy in to it? There is no simple or quick answer to this. It takes time – indeed it is a task without end because, as a leader, one of your key roles is getting buy in to the vision. The bases for it are powerful, passionate communication, strong networks through which to communicate and a crystal clear message repeated over and over and over again. So that’s easy then.

The thing is that you must not ignore the people on the other end of this communication process. The more varied the communication and influencing methods you use, the likelier you are to have an impact.

The other thing about vision is that it should be ubiquitous. It should drive every aspect of your organisation. It is for this reason that a friend of mine always insists that a vision should be one or two words. You can then use this to inform all aspects of your organisation. If, for instance, your vision is to Be Colourful you can examine how your stationery is colourful, how your toilets are colourful, how your recruitment is colourful, how your offices are colourful, how every little thing is colourful. And if it isn’t you can then think about how it could be! If your vision were one or two words what would it be?

Values, passion and faith

For profit making organisations, profit is a very small difference between two very big numbers. A small change in either of those numbers has a huge impact on the profit. In all organisations the cost side of this equation is easier to predict, easier to manage and easier to control than the revenue side. It is easy for me to tell you how much you can save on a particular project by reducing the staffing. It is pretty much impossible to predict how much revenue will be lost as a result or what work will not be done. This leads to discussions with one side being based on numbers and facts and the other side being based on principal and belief. In most organisations the numbers and facts win. This is just as true for not for profit organisations.

The primary difficulty here is that the easily measurable effects are often short-term and the less easily measurable effects are often long-term. So, by the time you find you’ve done the wrong thing you are already too far down the path to correct the problem.

This is why values (internal and external) are so important. They give you something to hang your passion and faith on. They move the argument away from – ‘I believe’ versus ‘I can prove’ – to an argument based on what we stand for around here.

So?

An edge of chaos organisation is one that has a clear view of where it is going. It is prepared to change short term direction at the drop of a hat but gives far more thought to long term changes of direction.
An edge of chaos organisation has a strategy that is planned from its long term vision backwards. The plans that emerge from this strategy are not ones that appear easily achievable. If they do then they are not challenging enough. It accepts that this strategy may never happen but acts as though it will (and then changes when it’s clear that it won’t).
An edge of chaos organisation has a clear view of what it stands for and is prepared to stick to that in the face of short term cost saving arguments.
An edge of chaos organisation is led in a way that protects those delivering from the uncertainty and difficulties of the day to day.
An edge of chaos organisation has a few (a very few) simple rules that guide its activity and everybody is committed to working to those rules (these might be values, behaviours, targets and/or activities).

Books and Stuff

Ralph D. Stacey, Complexity and Creativity in Organisations, Brett-Koehler, 1996 – an academic book and expensive, only for those who really insist

Philip J. Streatfield, The Paradox of Control in Organisations, Routledge, 2002 – another academic book but with more stories

Richard Koch, The Financial Times Guide to Strategy, FT Pitman, 1995 – not academic. A very traditional view but with a good summary of lots of different views of and approaches to strategy

David Firth, Freedom and Power at Work, not yet published – has (will have) a good chapter on conversations (you could take a look at his website www.davidfirth.com while you’re waiting)

www.plexusinstitute.com/services/Edgeware_archive/think/index.html - a web site with practical ways of thinking about and using tools for the edge of chaos

www.poolonline.com/archive/iss1fea5.html - an article on strategy and complexity

Paul Birch
Department for Teaching Grandmothers to Suck Eggs
Visionjuice – September 2007

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