As we discussed in previous posts, Organizational Agility is the convergence of two very different capacities – How responsive the organization is to trends, disruptions or opportunities in the operating environment, and the relative stability or lack thereof, for the stakeholders in the organization – employees, customers or investors/board members? Too slow to respond or too disruptive for stakeholders both undermine the viability and sap the vitality of the organization.
In the course of this series we continue to examine how this happens, what it looks like and what might be done about it. This week we begin with organizations that are stable but finding responding to changes in their environment really challenging – we refer to these organizations as “Bureaucratic.”
Organizations in this quadrant share one key characteristic – somewhere along the way – steadiness and reliability were cornerstones of their value proposition. Banks and insurance companies often fall into this category. Think of the value proposition of either – leave your money with us and someday, we’ll be here – and so will your money (to retire, protect your loved ones, etc.) It would be foolhardy for them to allow themselves to be seen as impetuous, speculative or unsteady in any way. Over time this reliability gets baked into practices, processes – even to what people on the inside value or see as important. In many a culture of “don’t make any mistakes” arises. What results is risk-avoidance and paralyzing caution. When there is a disruption in the environment (e.g. regulatory intrusion after the financial crisis) these organizations really struggle to comprehend the need, means or substance of altering their approach.
In order for these organizations to be more nimble they often try to import experienced executives (think of them as alien DNA injected into the organism.) The result is an immune system response. The intensity of resistance (really regular folk trying to avoid loss) often kills off the alien DNA or just drives it out before the change can occur. This explains why many banks are on Risk Officer number-two or three since 2008 and why many insurance companies have exited whole lines of business. The cost of change was unbearable.
Instead of abandoning their default outlook about the importance of reliability, “Bureaucratic” organizations have to create holding environments – ala “laboratories” where experimentation can occur. This is a requirement not only for the alien DNA and their ideas to have half a life, it also protects the balance of the organization from feeling the need to crush the new activity by slowing down discussion, exploration, decision-making and approval – the tools ordinarily employed to protect them from “mistakes.”
A couple of diagnostic questions:
1) If your organization scored in this quadrant – what are the origins of a need for reliability and/or safety in your history?
2) Have you seen new people arrive, flame out and get killed? If so, how do you understand what they were asking your organization to give up?
3) Are there people/places currently trying something new and different? If so, what can be done to create a stronger holding environment in which they might continue their work?
Good luck. This work is best done with partners. We’ll be back next week.