Does Your C-suite Have a Rosier View of Organizational Reality?

Leaders often have a simplified view of their organization’s complexity. They have a “rosier view” of how their organizations really work – as seen by the people within them.

Those changed with making things happen tend to see up to 20% more complexity than senior leaders. This has important implications in terms of balancing high levels of strategic ambition, with confidence in execution.

Two Alternative Realities

Which organization are you working in:

• Is it the organization that operates smoothly and makes things happen?
• Is it the organization where getting stuff done presents real challenges?

The answer depends on your level within the organization. In particular, the higher up you go, the rosier your view of organizational complexity. This is clearly evident in terms of a gap in perceptions of up to 20% between leaders and their teams. As a result, leaders can struggle to understand the challenges that leaders face in getting stuff done. Especially, the strategically important stuff.

“Know thyself” is ancient wisdom. It also key to organizational success. But how well do organizations really know themselves? Not their strategy or their organization chart, but the way that they work. Especially when it comes to getting stuff (and in particular strategically important stuff) done.

As one of our coaching partners says: “It’s as if there are two divergent realities within many large organizations”. Has leaders rise-up the organization it is easy to get out of touch which the daily requirements of getting stuff done. That includes:

• Bureaucracy, hierarchy, silos,
• Competing projects or priorities
• Changing business needs and priorities
• Scarce resources
• The challenges of aligning internal stakeholders, etc.

Organizations are complex. Typically, the bigger and the longer established the organization, the more complex it will be. By virtue of its size and complexity, a large organization it will struggle to act with the same speed, agility or innovation as start-up, for example. Yet, organizations tend to overlook their own complexity.

Perhaps it is another form of optimism bias, but the implications of the leader’s rosier outlook include:

• Divergent expectations between those who set the strategy (at the top) and those who are charged with implementing it at the coal face.
• Challenges in converting ambitious plans and strategies into action or results.
• The risk of hubris or overconfidence and the risk of surprise setbacks and disappointments.
• Leaders maybe slow to talk about risk or to get real about plans and resources.
• Failure to really address the need for greater speed agility collaboration and innovation.

An organization must own its complexity. That includes all 3 dimensions of internal complexity – ways of working, ways of interacting and ways of aligning both within and between teams. Let’s explore each of these in turn.

Ways of Working

Working within a large organization is inherently complex. That is because organizations were built for predictability and control, when today’s business environment demands more.   

Traditionally, the organization was organized from top to bottom along functional lines. This provided for visibility, predictability and control – the factors that ensure ‘business as usual’ success.  

Today, the emphasis has changed. Accelerating change means that business as usual is being overtaken by business unusual. The efficiency of last year’s products, processes, technologies and even business models is no longer enough to ensure sustained future success.   

Coping with change and uncertainty demands speed, agility, collaboration and innovation. Hierarchy, bureaucracy and silos – these are factors that compound complexity. The traditional ways of working, planning, budgeting, strategizing and executing are no longer adequate.  

In this context, we use the metaphor of a pitstop – where the ability to make effective mid-race adjustments (to reflect chancing conditions) is key to success.

Is Rising Internal Complexity a Risk to Your Ambitious Plans?

Ways of Interacting

It is common to talk about an organization as a complex social system.  That’s a change from talking about the organization as a machine.  However, the implications for leadership are profound.  

Today’s leaders know that redrawing the organizational chart is only a small part of any change initiative. 

Changing culture, attitudes and behaviors is the greater challenge. This is where the real complexity often resides.  

How to measure the level of complexity in respect of ways of working within an organization?  We measure the level of complexity based on 8 key behavioral dynamics within and between departments, functions and teams.  

It is important to note that we never talk about dynamics with a team as being bad and, we try to avoid judgmental terms, such as ‘dysfunctional’ or ‘chaotic’.  

Rather, we embrace complexity, expecting to see ambers and reds (as well a green ratings) in terms of the dynamics of any team.

Ways of Aligning

When people pull together, amazing things can happen.  However, ensuring that people from different departments and teams are pulling in the same direction can be a real challenge.  

Leaders are regularly heard saying that their organizations are ‘one big team’.  However laudable this ideal may be, it runs counter to so many aspects of how organizations work:

• How targets and priorities are set
• How resources are allocated
• The way rewards are distributed
• How strategies are devised, etc.  

How to measure alignment in a practical way?  Well, we measure the level of clarity and alignment, both within and between departments, functions and teams, in respect of:

• Results
• Priorities
• Purpose (specifically ‘fit for purpose purpose’)