S&R as Post-Industrial Managerial Paradigm

An adaptive management model is the missing link in current attempts to transform businesses into adaptive organizations. Adaptive people, technologies and infrastructures are necessary but insufficient, because the legacy industrial age management paradigm systematically discourages the exploitation of adaptive capabilities. (See the August 8, 2005 entry on the News Item page for a brief summary of the industrial age model.)Those firms that have made a degree of progress in becoming more adaptive (or at least more agile or resilient) have by and large relied on process improvement, adaptive technologies, and on what Bruce Harreld of IBM has called "the heroic model " of management -- counting on exceptionally talented people to break the rules without breaking too much glass.

Sense and Respond fills the adaptive management gap. It is a fundamentally different framework for on-demand, customer-back businesses; one that systematically leverages adaptive individuals, technologies and infrastructures to produce and scale adaptive organizational behavior.

An organization that does not trust its ability to predict what needs doing can no longer rely on planning, process designs, hierarchies of authority, and command and control. Instead of focusing on operational excellence to efficiently make and sell products and services that customers were predicted to want, an adaptive enterprise must be designed to sense and respond effectively to what is actually happening. It therefore needs, as core competences, the capabilities to: know earlier (anticipate) the meaning of what is happening now; dynamically dispatch modular capabilities in response (preempt); and express strategy as a systems design of roles and accountabilities. This transforms strategy from a plan of action into a structure FOR action. The organizational design becomes the main strategic document, and policy executives must therefore acquire competence as business architects. In an adaptive Sense and Respond enterprise, leadership controls context, not process and activity.

Such anti-systemic behavior happens all the time in business, leading to unnecessary redundancy and fostering non-productive, very expensive (though rarely measured) internal  conflict. A major advantage of system designs is that they obviate the need for matrix management -- whose relentless suboptimization costs large, multiple product global firms hundreds of millions of dollars a year in opportunity costs as well as significant internal transaction costs. An organizational system design does not solve these issues, it dissolves them. It also invests an organization with other important attributes, among which are synergy, role and accountability clarity, and intrinsic alignment of capabilities around a common purpose.