Stephens Business Playlist 15Nov21

An ongoing series where I share a “Business Playlist” of articles that made me think in the hope that you find them valuable also.

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Leadership “wisdom” that makes me crazy

Disclosure: Wally Bock is a friend and mentor. He coached me to write my book “Business Execution for RESULTS” and is one of the most well-read people I know on the subject of business. 

In this short article, he skewers a list of so-called management wisdom. A couple of the things that make him crazy are also pet peeves of mine, especially:

Leaders versus Managers

From Wally, “Argh! I don’t care what Warren Bennis said. It’s not about people. It’s about different kinds of work. If you’re responsible for the performance of a group you have to lead and you have to manage and you have to supervise. You don’t get a choice.”

I also wrote about the real difference between leadership and management. They are roles to be performed not a statement about what sort of person you are! 

That Stupid Bus!

“Getting the right people on the bus and then deciding where to go sounds good, until you think about it. First off, most managers don’t get that luxury. They have to achieve the goals they’re given with the people they’ve got. But more fundamentally, how can you know the characteristics of “the right people” until you know where you’re going?”

Wally and I are simpatico on this one. I wrote a critique of the Jim Collins bus analogy many years ago, upsetting a few Jim Collins fans in my network. I stand by my words.

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What I Learnt From Complexity

Fascinating summary by Cedric Chin of the book, Complexity – The Emerging Science at the Edge of Order and Chaos, by M Mitchell Waldrop. I have just started to read the book on the strength of Cedric’s recommendation. 

The book refers to Complex Adaptive Systems (CAS) – a system in which a large network of components with no central control exhibit complex behaviour, sophisticated information processing, and adaptive learning – e.g. natural ecosystems, biology, the economy. 

An analogy used to understand CAS is traffic on the motorway. 

Imagine your commute to work involves roughly 1 hour of motorway driving (on a good day). If I were to ask you to predict how long your commute will take next Friday evening, what would your answer be? You could give me a generalized range of times based on your past experience, but an accident involving a truck on the day in question could block traffic for miles and grind your commute to a halt. 

According to Cedric, “The point here is that small changes may lead to unpredictable end states in a complex adaptive system. You cannot predict what will happen in the future. History is like traffic: even tiny events might snowball into world wars …. and therefore you must learn to act without prediction.”

Let’s apply this to business. A smart leader will watch the system (industry) closely, adapt to what they see, and place small bets on emerging patterns. You place survivable bets, you don’t bet the farm (or firm). You continually review and update your strategic plan based on changes in the environment. This is called “effectual reasoning”.  

Smart people, when asked to make predictions, typically say words to the effect of, “I don’t know for certain, but here is an emerging pattern I am paying close attention to, and here is what I am testing to see how it plays out”. 

Smart people are seldom precise in their opinions. They will only make broad predictions and quantify their level of (un)certainty. They place cautious bets, watch closely and iterate, and then double down on the bets that show the most promise.

Contrast this with those who speak with supreme confidence, claiming they can predict the future with cause and effect formulas. This is called “causal reasoning”.

Economists and TV pundits bloviate with an air of certainty about what the economy is going to do, without being held accountable for the accuracy of their predictions, or being forced to put skin in the game by publicly making a financial bet on their forecasts. 

It reminds me of so-called business thought leaders standing smugly on Ted Talk stages claiming to possess a magic formula for business success. These modern-day charlatans peddling snake oil typically reference a well-known company brand (ignoring the obvious survivorship bias) and retrofit tenuous associations to make it appear their magic formula somehow “caused” the success of Apple or Google. Don’t get me started naming names! 

These charismatic people know they are not likely to be called to account to prove anything. All they are selling is their next consulting gig, TV spot, or Ted Talk. They peddle simplicity and certainty, in a world where complexity reigns supreme.  

From Cedric, “Reading Waldrop’s Complexity made me realise that whatever skill I had (organization design in his case) was like any other skill in the face of a complex adaptive system: it was a skill of iteration in response to observation of a system. You don’t really need a set of universal equations to make good decisions in a Complex Adaptive System; you simply need to learn to watch the system, or others like it, and adapt to what you see.” 

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Until next time…
Stephen

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