One of my favourite social engineering experiments is a computer simulation showing how ghettos form. A simple model of housing markets in which digital sellers are programmed to have a preference for certain types of buyer. If I move into a new housing development situated between, say, Bradford and Leeds, and my neighbours have a bias towards selling to someone from Leeds and against someone from Bradford, then, over time, the development will, horror of horrors, become chock-full of Loiners. The amazing part of the simulation is that it only needs a tiny amount of bias – a seller might have a 51% inclination to sell to another Loiner and a 49% inclination to sell to the Bradfordian – to eventually produce developments that are completely Bradford-free.
Meanwhile, on a separate subject, in theory, this (crisis) time in history is the perfect time for innovation. A few organisations seem to get it, but more don’t. Maybe it only needs a few? I don’t know. From a save-the-planet/save-society perspective, the likelihood is we need a lot more.
So where are they?
A big part of the problem, I think, has to be attached to the forty-plus years of Operational Excellence almost all organisations have been taught is critical to their success. Nothing is that simple of course, the almost complete replacement of actual leaders with meak, anti-brave, rule-following managers is an emergent phenomenon. Which means a conspiracy of multiple contributing factors. Like forty-plus years of ‘continuous improvement’ thinking, forty-plus years of MBA programmes teaching students how to use spreadsheets, draw Gantt charts, Manage By Objectives… I could go on. What the whole shebang ultimately leads to is c-suites crammed full of Red-World thinkers. People that know how to climb s-curves, but have no idea what to do when they hit the top. Or, in most cases, are aware that there is such a thing as a top.
Don’t get me wrong, having the skills to successfully navigate an organisation up the s-curve is important. It creates efficiency, economies of scale, and, for a while at least, impressive sounding EBITDA figures. On the down side, when taken too far, it makes the organisation extremely fragile. Such that when the outside world shifts – a pandemic arrives, for example – and the organisation finds itself thrown off their nice stable s-curve, Red World thinking is no longer going to help. What these organisations need is a healthy dose of Green World thinking. Something that Red World unfortunately fails to recognise. And so what tends to happen is a c-suite that doubles-down on the prevailing problems and becomes even more Red. Doubling down on getting people working harder, chopping costs and flogging the Sales team so they ‘try harder’. This is generally called a slippery-slope. And the thing with slippery slopes is they get slippier if we keep doing the wrong things to get off them.
When the world of management creates c-suites full of rule-followers, it is only a matter of time before things will start going wrong. Exponentially, slippery-slopery wrong. Rules, like almost everything, have a half-life. A half-life that was already past due before the arrival of Covid-19, and now look positively stupid to everyone except, it seems, Red World managers. Which is just about all managers.
How did that happen?
The answer merely requires us to think about how promotion works. The most visible mechanism is hitting KPIs. If I hit (or, better yet) exceed my targets I’m more likely to get promoted than someone that doesn’t hit theirs. Especially if I keep doing it. This gives an immediate problem for people operating in Green World roles, where, very often it makes no sense to set any kind of target. And, when Red World forces a declaration of ‘something to aim for’, Green World people know there’s a more than fair chance we’ll not end up where we said we’d end up when we were forced to make our solemn promise at the quarterly review. Either because something went wrong, or we found a more interesting, more productive direction. If something went wrong, Green World thinking tells us that it was valuable ‘learning’. If we found a better direction, it was also learning and a potentially much bigger prize for the company. Only, as far as Red World is concerned, neither is what we promised we’d do. In Red World, what gets promised had better get done. And getting stuff done repeatedly and reliably is what leads to promotion. Promotion-oriented people rapidly learn, when in Red World do as the Red Worldians do. Apply that logic for a few years and we end up with organisations in which Red Worldians have promoted themselves to fill all the senior positions inside the organisation, they know how to manipulate their personal targets to make sure they’ll be achieved, and they know how to set tough, ‘stretch’ targets for everyone lower in the hierarchy that will – pass or fail – still make them look good. Red World in this sense comes to look like a demented Ponzi scheme. And all the time, like any good Ponzi, the organisation is making itself more and more fragile. Usually with the Green World thinkers looking on with their jaws on the ground. How could managers be so dumb?
Answer: a not-so-winning case of Confirmation Bias. One that means all evidence, irrespective of bigger picture reality, confirms the Red dogma that Red delivers and Green procrastinates. Ergo, always promote Red.
And, worse, now the world has had forty-plus years of this Red Ponzi game, the people at the top of the organisation most likely never found themselves exposed to Green thinking at all. They know only Operational Excellence. They see only continuous improvement. They do not see the cliff-edge at the top of the s-curve. They are Green blind.
To the point, that in the last few years I’ve concluded that, when I’m given the rare opportunity to teach on MBA programmes, I’m giving the high-flying middle-manager students their first awareness that there is such a thing as Green World. Most of them, I know, will have a bit of confused fun during my time with them, but will then forget the message. Some, however, even though they may decide Green-World is not for them, will at least know that it exists and has a vital resilience-building function within any organisation. My hope is that when these people find themselves at the top of the corporate pyramid, they’ll be the first generation of leaders to understand that they need to make sure there’s a critical mass of Green thinking beneath them, so that when times get tough they know its time to bring these people to the front and let them work their rule-re-inventing, get-out-of-Leeds, magic.