Thursday, February 23, 2006

The Technology of Change

The use of lobbies, groups, political tools, consultants, the creation of consensus, negotiation of terms, participatory processes for decision making, documentation through white papers, use of models, and modeling all aim to increase our success as decision-makers, make us more effective.

Of these models are mathematical representations of the process that drives change. Just as you do not have to be an architect to read the blueprint plan of a building, you do not always have to be a mathematician to see the blueprint of change described by a model.

The Power of Models
No wonder models have been used to document decisions; to justify decisions and provide auditable evidence. Models have created organizational legacy; they have documented knowledge and experience of the systems and processes that the organization encounters. They have helped us to bootstrap previous models and provide an advanced decision-making capability.

Models have also provided us with vehicles to share our basis of decision-making. Different stakeholders can have access to the model, although they may not have access to the decision-maker. Models have therefore helped to bridge perspectives, to create a backgrounder for negotiation, even a basis for policy.

Models have served the needs of those governing to create and contrast scenarios. They have helped serve as the basis to evolve policies or strategic intents. Models have helped the managers to clarify policy; to explore decision-possibilities within the policy space. They havehelped undertake performance appraisals, served as a means for designing indicators for reporting the state of the systems being managed.

The Opportunities for the Future
Like architectural blueprints, models support our reasoning needs but only few models may support our needs of feeling. There is also a huge variance in the ability of different models to serve our needs. Like the architectural blueprint, a model is often seen as a surrogate decision maker, a substitute to oneself.

Unlike team members who learn, adapt and work with the us, the model is usually a given; a pass-me-down. Unless we have modeled the model ourselves, the model works on purposes that may not be shared with us. To us these purposes may become cross-purposes, non-existent, “hard-coded” or undocumented. So while they capture knowledge and experience, models often fail to allow modification of the premises from which they draw conclusions and recommend decisions.

Technology of Change
However it is models that help us to look at designs of reality. The way things could be, not just the way they are. In this sense they are unique in their offering; unique as a technology of change. Offering the application of our knowledge of the driving forces of change to redesign change. In fact models provide the decision-maker the basis for the (re)design of the system or process.

The Frontier of Technology of Change
The big role models have to play in the next 20 years is to serve as a colleague with the ability to build consensus, create buy-in, provide participation, keep secret strategic and tactical scenarios, a colleague capable of rapid comparisons of scenarios in-context and on-call, a team-member bringing mission focus, a sounding-board. In fact models will be the essential blueprints and serve as an essential standard of openness and good governance practices in the years to come.

Monday, February 20, 2006

7 Habits of Effective Decision Makers

As a decision-maker what are your most critical habits?

Yes, we all have habits that alter our effectiveness as decision-makers. But which of our habits will help us become more effective? Which habits are becoming necessary in a increasingly complex decision space? Here is a selection of 7 habits that you will find with the most effective decision-makers.

Seek Participation
The most effective decision-makers seek to involve stakeholders in their decisions. As a habit they ensure enough buy-in into decisions. They seek include, not exclude.

The principle of inclusion seeks to carry people together towards a common interest. Good buy-in seeks to align everyone with recognition of a common purpose of being together.

In different ways the Japanese have excelled in this habit, as have the Chinese. In these cultures a decision “emerges” from the stakeholders or as that of the stakeholders. The habit of this decision-maker to seek buy-in facilitates the process but does not dominate it.

With globalization we may need to buy-in increasingly diverse stakeholders into decisions. With the diversity, geographic, cultural and economic discontinuity this is becoming an ever-complicated task. Naturally the habit of buy-in in such contexts poses greater challenges.

Ensure Impact
Without impact no decision can be effective.

However most decisions involve diverse people within and outside our organizations. Routinely we need to delegate decision-making. When decisions need to be delegated to staff the context and options need to be clearly explained or bounded. Usually we use a “policy” to ensure a common decision context for such groups.
The policy therefore acts as a means to bound decision-making. A policy usually creates impact merely by virtue of alignment of decisions. Naturally it may become important to attend to the development of a policy itself.

It is a habit of impact makers to ensure clarity and focus in policy itself.

Evolve Alibi or raisons d'être
Depending on our style of decision-making and our perceptions about the audit of decisions and responsibility of impact, we may seek either an alibi or a raisons d'être for our decisions.

Decision makers who work with feeling seek alibi of “right feeling” about decisions. Those who work with reasoning seek out a logic for arriving at the decision. Either way the decision makers habit to seek out alibi or raisons d'être ensure effective communication of the decision whenever it may be called for.

Both alibi and raisons d'être serve to provide a feedback on impact-ability, ego-gratification, belonging, success, and fulfillment. All of which are necessary for maintaining the effectiveness of the decision-maker.

Build in Audit Ability
Increasingly our decisions undergo audits or post-mortems and need to be clearly justified. Naturally we seek to have a means of justification, demonstration of impact or the value of the decision in comparison to other options.

The case of Enron, WorldCom, the Iraq war, the dot-com bust, the electricity breakdowns in the US and Canada are but some examples that have caught the public eye for a long time. Undoubtedly you have your own private set of experiences where decisions have been called to audit that may be at least as disturbing.

The habit of a good decision-maker therefore ensures justification will be possible. An audit trail will help recreate the compulsions of decision-making and help justify that which was done.

Understand the Roles of Different Actors
We grapple to impact our systems where multiple and diverse stakeholders, like us, attempt to do the same. Not all actors have the same role in any system. Naturally the options they have to impact the system are different. The interest they have in different outcomes may itself differ.

What are the roles of the different actors? What are the options before them?

Effective decision-makers have a habit to identify the role of all actors and the options open to them. This ensures they can be more effective in the participatory process, and eventually as decision makers.

Creating Maximal and Lasting Impact
Not all actors have the same leverage in any system. Who has the maximum impact? Who can have lasting impact? What are the indicators used by different actors to asses their impact?

What is our ability to impact or regulate the indicators that matter to the stakeholders in our system? Effective impact-makers have the habit of identifying the leverage points, or decisions that result in maximum or lasting impact, and regulating the behaviors of key indicators in the system.

Creating Rapid Decisions
Given the pressures from lobbies, political instruments and even time (perhaps the most dangerous of them all!), the ability to make quick decisions means a lot to an effective decision-maker as well as for the success of our missions themselves

Many systems have becoming increasingly slower to respond to our decisions. At the time many systems can remain agreeable without intervention for increasingly smaller times. Effective decision makers therefore have the habit of rapid decision-making.

Even as they may hope to speed the systems responses to our decisions or struggle with making the system remain agreeable longer on autopilot, they seek to be quick to make decisions.

The Effective 7
In a global and competitive environment that selects for the best decision-makers, decision-makers are only increasingly under pressure for successful decision-making. Thus critical habits to of a decision-maker:

  • Develop policy rapidly,
  • Find points of maximal and lasting impact,
  • Recognize the role of different actors and actions,
  • Ensure impact,
  • Insure buy-in through participation,
  • Provide an alibi or raisons d'être, and
  • Provide a means for justification and audit.


Thursday, February 16, 2006

Sustaining Amidst Challenges of Growing Complexity

Inspired by   to look at the "Flat World", has described some of the complex changes that have altered the nature of the world as we knew it.

Both individual and participatory decision-making has become increasingly complex as our decision contexts have become increasingly more complex as the world moved into what is Friedman describes as a third phase of globalization.

In this phase individuals across the world enter into relationships and drive opportunity and impact. Unlike the previous 200 years where globalization was driven by industry for markets and labor, this phase creates far greater number of linkages across distant geographies and is driven by greater diversity of events, purposes and actors. This also throws up newer combinations of systems that co-exist and result in yet un-experienced worlds for the us as decision-makers.

As a consequence of the increasingly complex systems, we experience an increase in the time it takes for the system to respond to our decisions (Response Time). This radically alters their ability to impact and be effective. Dramatic examples are seen in time it took for our systems to respond to the Tsunami warnings, control of the SARS outbreak or it is taking to  implement the UN Millennium Goals. In everyday life have you noticed the time it takes to have your post to the electronic or print media to become visible? That is the time the system took to respond.

Simultaneously the time the acceptable conditions will last in the system without intervention becomes smaller and smaller (Respite Time). Altering the time the acceptable condition can last without intervention requires greater effort, teamwork and understanding on part of the different stakeholders and decision-makers. Dramatic examples are seen in the smaller and smaller time that our societies are able to maintain themselves free from poverty, hunger, homelessness, unemployment and disease. Or in our day-to-day experience the smaller and smaller time that the media is able to maintain relevance without active intervention.

Given these changes and complexity, it is natural that the positions taken up by different stakeholders and the interests  of the different actors in a system are increasingly out of context and often threatening for different stakeholders. Decision negotiations are usually a bigger nightmare than before. The decision context is therefore saddled with an increased diversity of normative and prescriptive conflicts.

Those of us with a cognitive approach using “utility functions” or weighted comparisons or other logical methods to arrive at decisions can increasingly find our premises to be conflicting or part of conflicting contexts. For example the weight given to the environmental concerns, poverty, equity, globalization or free trade in different countries may not follow a consistent pattern. Or demographic concerns and therefore resource requirements, production and delivery logics tend to be completely different.

Those of us with a strong affective approach are often likely to find our contexts largely lacking for feeling or often get mixed messages. For example in the absence of physical proximity we may find it virtually impossible to understand the hugely different “feeling” of colleagues or stakeholders across the oceans or cultures. The arrogance, humility, anger, despair, concern, indifference or compassion of our colleagues may seem out of place.
Whatever our actual style on the cognitive-affective continuum, the changed contexts pose considerable challenges.

Like the world, which has shrunk with globalization, the computers have shrunk from occupying a building to a palm. The computer has extended its reach from itself to a local area network to wide area networks and the internet. It has therefore made it possible for distant actors, purposes and events now have omnipresence and even amplification. This makes it possible for rapid shifts of dominance of messages, purposes and actors. It is not unusual to be subject to many conflicting blogs, emails, feeds every day.

Naturally the traditional structure of organizations, departments and divisions are rarely as stable or insulated as in the past. Teams, even virtual teams form, perform and reform around missions rapidly across the world.

In view of this altered context of decision-making, how have our challenges to manage change altered?

I can see that firstly there is an increased need to deal with the variety amplification or cope with complexity. This means we need ways in which we can deal with the huge increase in information that we are subject to. We need ways to hold our world together, to reduce the complexity of the world we are a part of.

Secondly there is a greater need to deal with timing, especially if we are concerned about the sustainability of the systems we are a part of. We need ways to quicken the pace at which the system can respond to our inputs. We need ways to increase the time the system can auto-pilot without disaster.

How can we cope with these altered contexts and be effective in sustaining the systems we are a part of?

Suggested Links

1. Thomas Friedman, The World Is Flat: A Brief History of the Twenty-first Century, Farrar, Straus and Giroux, 2005


Saturday, February 11, 2006

Decision Making in a Connected World

The most compelling concern for us as decision-makers is about our impact. Whether it concerns the maintenance of service levels and economic growth in an ageing Europe, the outsourcing of services from the USA, employment security for half of the Indian population who happen to be under 25 years of age, peace in the middle east, allocating of the development aid by the UN, off shoring manufacturing to China, the trading of commodities, bilateral trade negotiations based on comparative advantage, or mergers and acquisitions across industry segments, we as decision-makers are paranoid about impact.

Our biggest challenge: knowing if the decisions we drive are indeed the driving force of change that creates the impact we desire.

Reports, analysis and studies document the impact of many a decision-maker, including our own. The Profit-and Loss statements of businesses, the GDP databases for nations, the Asset statements of individuals, organizations or even nations, unemployment numbers, the economic growth rates, the carbon levels or global temperatures all reflect the effectiveness of different decision-makers. As individual decision-makers, as an organization of decision-makers or as a nation or globe of decision-makers our effectiveness is documented by the State of the World, World Development Indicators, Fortune 500 lists, Worlds wealthiest, the most influential, the most powerful or most successful list.

It is well known that only a small fraction of individuals, organizations and nations retain their rankings in such lists from year to year . The history of such lists underlines the changes in impact the decision-makers have relative to one another. The records of impact highlight the statutory warning: such documents of performance present a history of performance, not a guarantee of the future.

Our performance results from the our understanding of the “system” and “required” interventions; it results from our agility to alter the scope and purpose of our systems and interventions. This understanding of the system and interventions makes up our “mental model” . An array of these mental models helps us to navigate to success. These mental models change and evolve; even co-exist in multiple versions.

These mental models are too many; they interfere with one another, produce too many complexities. Their paradoxes, incompleteness, exclusions, variations and inherent prejudices make them impossible, even embarrassing, to share. These models make up our very identity; they create the power to bring about change. They display our agility. They demonstrate our mission focus and display our strategic depth. They help create impact.

The remarkable work in the disciplines of mathematics, computer and information sciences, economics, systems, operations research, biology and chaos have yielded thousands of models, and even meta models that have helped many a decision-maker, perhaps also you, to enhance their own mental models. Increasingly decision-makers have learnt to articulate their mental models using the methods of formal modelling. Strategic planning, collaboration, transfer of technology, business of process reengineering, even automation and web-application have used these models to drive mission success.

What are the possible roles modelling can play over the next decade in helping us to enhance our performance in the changing contexts of decision making?

What will be the difficulties that need to be addressed, the technologies that need to be strengthened, and learning that needs to be accomplished to enable modelling of change to play a pivotal role in driving impact and be accessible to the decision-maker?

Suggested Links

1. Conversation with Arie de Geus Every Institute is a Living System
2. Kenneth Craik The Nature of Explanation
3. Johnson-Laird, P Mental Models


Friday, February 03, 2006

Engaging Actors to Sustain a System

Pointing out that there is nobody who really acts as a global trustee, Klaus Schwab, Founder of the WEF, asked Bill Clinton what institutions can be developed for the 21st century in order to be really capable to be respond to global challenges?

As Bill Clinton pointed out, the profound need for responding to global challenges calls for an engagement of actors who influence the global systems that confront the challenges.

All institutions engage actors; those that sustain impact and therefore the system they are a part of, have a remarkable skill at engaging all actors that make up the system they attempt to influence. It is little wonder to see that the most lasting impacts have involved partnership to a common vision or even a common goal of all the actors within a system.

Examples of such remarkable successes that may add to your own repertoire of examples include the interventions of the Gates Foundation in Mozambique, the intervention of the Rotary International in Polio eradication, or even the ubiquitous presence of information technology in our lives.

Unless such profound engagement is accomplished, the diverse aspirations of different actors within the system makes results snap back or even oscillate from impact state to previous state as dominance of actors shifts. The remarkable buffering to change through such a homeostasis or , makes it difficult to sustain impact and therefore even a system.

The first principle of sustainable action draws from this wisdom, recognizing that actors within a system drive homeostasis, equilibrium or status-quo. Sustained impact requires engagement of all actors within the system.

Underlying the very sustainability of the system itself is the relationship between its constituents: the actors. If they do not engage in shared goals or have vastly diverse goals it is likely that they will crumble the basis of their relationship; the system itself. Thus, for example, if buyers and sellers in a market system refuse to share a goal of trading, the market cannot be sustained.

We are all part of hundreds of systems: our family, community, learning systems, market systems (skill markets, commodity markets..), banking systems (as borrowers or even lenders..), the ecosystem; unless we follow the first principle of sustainable action, we erode the very sustainability of the system itself.

In larger than system timescales, this appears as the transience of systems; their coming to being and falling. Systems are born, they arise and they fall and disappear. But the first principle prevails...