To be resilient requires that we be open to new ideas.
That has been a message in a number of the posts in this series, including the previous post discussing the Hamel & Valikangas article.
Here is a new idea – resilience can mean different things in the Strategic, Tactical and Operational contexts of an organisation.
Not only that, but we need to harmonise those meanings (and the actions they inform) across the different contexts in order to achieve an overall balance of resilience.
The Strategic Challenge that Hamel & Valikangas suggest (the need to ‘value variety’) is enabled, to a great extent, by the Tactical and Operational levels of the organisation. And it is often in these arenas where their Political and Ideological Challenges are fought, and all too often lost.
The basic problem is well illustrated in the cartoon. Are we open to exploring new possibilities (innovation of business models and processes) or are we too focussed on the exploitation of old certainties?
Product and business model diversity are important to Strategic Resilience, but it seems to me that the application of this conflict to learning is more important to the Operational and Tactical contexts of resilience. This conflict is explored by James March, Exploration and Exploitation in Organizational Learning [Organization Science, Feb 1991].
In a healthy organisation, both exploration and exploitation need to occur. But they compete, in the organisation’s political domain for scarce resources. Here the decisions are influenced by a range of explicit, and more importantly, implicit choices. These implicit choices are embedded in the culture of the organisation – e.g. procedures, target setting and incentive systems.
Exploration (innovation) tends to suffer because the returns are less certain, take longer to realise and are often removed from the core operations of the entity.
“performance is a joint function of potential return from an activity and present competence of an organization at it”
More significantly, March argues that the adaptive processes of an organisation will tend re-enforce this tendency. As a result these unchecked adaptive processes are potentially self-destructive.
The operation of these adaptive processes within the social context of learning in organisations has two distinctive features;
- Mutual Learning
- organisations store knowledge (in procedures, rules, norms and forms) which is accumulated by learning from its members
- at the same time, individual members are socialised to organisational beliefs
- Competition for Primacy
- organisations compete with each other and as such relative position matters
- hence the perception of the contribution of knowledge to competitive advantage will be important in the trade-off decisions between explore/exploit.
Let me inject a second new thought here – the Tactical layer of organisations is strongly influenced by external ‘professional’ and ‘specialist’ bodies – each with their own ‘bodies of knowledge’ and culture. Each of these bodies will also have a similar social learning context, and face the same dilemma between exploring new knowledge and exploiting their current body of knowledge.
Therefore we need to think about these ideas in terms of the internal issues (for the organisation and the professional bodies) as well as the level of interaction between organisations and these professional bodies.
Returning to the concept of mutual learning, the “organization socializes recruits to the languages, beliefs and practices that comprise the organizational code” while at the same time adapting that code to individual beliefs.
“The beliefs of individuals do not affect the belief of other individuals directly but only through affecting the code. The effects of reality are also indirect. …
Improvement in knowledge comes by the code mimicking the beliefs (including the false beliefs) of superior individuals and by individuals mimicking the code (including its false beliefs).”
March uses some mathematical models to illustrate that the rate of socialisation and the level of turnover are significant variables in the overall improvement of organisational knowledge;
- “the code can only learn from individuals who deviate from it” – so rapid socialisation is a negative impact on exploration, but re-enforces exploitation
- “A modest level of turnover, by introducing less socialized people, increases exploration, and thereby aggregate knowledge.”
Hamel and Valikangas’ “Resilience Gap” also creates a problem for the development of organisational knowledge. A high level of turbulence and change in the outside world tends to make the organisational code less relevant to reality. Citing Weick (1979), March observes that “environmental change makes adaptation essential, but it also makes learning from experience difficult”. Furthermore mutual learning has a longer-term negative impact when there is turbulence in the environment.
Turnover is seen as a means to reduce this degeneration of organisational knowledge in times of turbulence.
March is not looking specifically at the impact of codified professional knowledge. I would argue that turnover, which brings new staff already socialised to the same ‘professional code’, will not have the same impact on improving organisational knowledge – nor encourage exploration. March puts it this way;
“Replacing departing individuals with recruits closer to the current organizational code would significantly reduce the efficiency of turnover as a source of exploration.”
The same principle applies to the professional bodies, who in times of turbulence, are not changing their thought leadership.
Understanding the need to strike an appropriate balance between exploration (experimentation with new alternatives) and exploitation (enhancing execution of existing competencies and technology) is essential to becoming resilient.
Understanding the cultural factors and the context of adaption that promotes exploitation – often to the exclusion of exploration – is more important.
When we look at the Tactical and Operational contexts some of the reasons for a lack of learning and improvement of knowledge may become clearer. We are still doing the same thing, exploiting the same core thinking. We have failed the “Ideological Challenge” that Hamel and Valikangas pose, often because that ideology is being promoted, re-enforced and fed back into organisations by external ‘professional bodies’.
We are conditioned to not be open to new ideas, simply to refine and exploit the current ideas.
Resilience needs to break down silos, not build a new one.
- A ‘Fail’ grade to those promoting ‘Chief Resilience Officer’ and the like.
- This is an example of exploiting current thinking, and the negative impact of mutual learning.
- Pass – if you are looking to encourage collaboration and synergy across the silos.
- You will need to experiment and explore how to achieve this synergy across disciplines and their ‘silos of practice’.
What are you doing to promote exploration of options to improve resilience in your organisation?
What are you doing to promote exploration of new thinking in your professional silo?
What new ideas have you personally explore lately?