Need for a Post-Industrial Leadership Paradigm
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.
An adaptive management paradigm is the missing element in current attempts to transform businesses into adaptive organizations. Because adaptive behavior is typically unplanned—often ad hoc– it is intrinsically inefficient and therefore persistently undermined by the existing efficiency-centric management paradigm. The metrics and practices fostered by this industrial age model frustrate attempts to empower people, instill a customer orientation, leverage adaptive technologies, and respond to unanticipated change.
Sense & Respond is a robust replacement of the legacy managerial paradigm. It is a fundamentally different framework of purpose, strategy, structure and governance that systematically leverages adaptive individuals, technologies and infrastructures to produce and scale adaptive organizational behavior:
- Purpose is defined as an effect on something or someone external to the organization (rather than an output or internal goal)
- Strategy is expressed as a modular system design of roles and accountabilities (rather than as a plan of action).
- Structure is an architecture of modular roles that shows where strategic investments are to be made. (“Structure is strategy” in S&R organizations.)
- Governance is the systematic propagation and assurance of global policy constraints to all roles in the organization.
The Transformational Foundations of Sense & Respond
Three essential requirements for dealing systematically with high levels of unpredictability are: 1) knowing earlier the meaning of what is happening now; 2) rapid and effective reconfiguration of modular response capabilities; and 3) a major reduction in the number of elements that must be predicted in advance by organizational leadership.
The Sense & Respond model uniquely incorporates and leverages three theoretical foundations to address these issues: system design principles, extended to deal with the specific nature of social systems; a universal and general commitment management protocol; and the “sense and respond” adaptive loop of complexity theory: sense-interpret-decide-act.
• The properties intrinsic to any rigorous system design literally dissolve the perennial managerial problems associated with ensuring alignment, coherent empowerment, scalability, and customer-back behavior.
• The properties of the commitment management protocol enable rapid reconfiguration of organizational roles. The dynamic linkages between roles are codified as commitments negotiated between ‘provider’ and ‘customer’ roles.
• Use of the adaptive loop to design role-specific information support systems substantially enhances the “knowing earlier” capacity –- and thus the speed and performance — of people occupying those roles.
Seen through the lens of a system designer, S&R is not only a prescription for adaptability, it is a remedy for all–too familiar managerial problems that persist and worsen as organizations get larger. Anti-systemic behavior happens all the time in business, leading to unnecessary redundancy and fostering non-productive, very expensive (though rarely measured) internal conflict. In one case where it was measured, sub-optimization in a large, multiple product global firm resulted in hundreds of millions of dollars per year in lost opportunity costs as well as significant internal transaction costs.
Note that systems are radically different from networks and processes. Networks guarantee connection, but not interoperability or coherency; systems do. Processes produce internal results called outputs….such as products, advice, diagnoses and appendectomies. Systems produce effects on someone or something external to the system…such as the patient, the taxpayer, the family, the customer.
Applying Sense & Respond principles to organizations is a new, post-industrial leadership competence. Why? In any enterprise, leadership is accountable for unambiguous declarations of purpose, strategy, structure and governance. But uniquely to Sense & Respond organizations, purpose, structure and strategy are expressed as a modular system design of roles and accountabilities. This means that policy executives must acquire competence as system designers. Done right, the implementation of S&R designs results in synergy, alignment, coherent empowerment, customer centricity, role and accountability clarity, and intrinsic adaptability.
This is a change in orientation from “firm forward” to “customer back” — co-creating value with customers as opposed to extracting value from them.
Click here to view a 20 minute S&R overview presentation given to Vice Admiral Arthur Cebrowski and his DOD Office of Force Transformation staff.