The problem with fast moving digital disruption, where groove-in (control of technological standards and/or technological familiarity) drives markets towards monopolistic competition, where the winner takes all, is that our traditional notions of management simply don’t work.
Historically, much of a manager’s work was about reproducing predictable order. However, the rising speed and complexity of economic change requires adaptability over predictability.
As markets are disrupted and move from bell curves to Pareto curves, profitability is not about incremental improvements, it’s about adapting to survive. Exposed to the convergence of technology and globalisation, increasingly managers are being forced to question the assumptions and decision-making routines that underlie their traditional best practices.
Whilst it is easy, in theory, to describe how management needs to have a flatter structure and to change its behaviour, in reality this is a major challenge to most managers’ training and experience.
Breaking the single loop
Chris Argyris, in Teaching Smart People How to Learn, described how many companies were, and still are, organised around a culture that he calls single loop learning.
In such organisations, legitimate management is defined through a vocabulary of productivity, efficiency and process improvements. People learn new tasks and competencies, but faced with significant change, managers seek to impose it upon their subordinates whilst retaining their own familiar environments.
My experience as a consultant, as well as research from elsewhere, indicates that this is a common problem and is a serious barrier to both organisational change and performance improvement.
On the other hand, Argyris shows that real gains in value creation, capture and innovation come from the questioning of basic assumptions that he calls double loop learning. Gillian Tett (pretty much the only journalist to predict the 2008 financial crisis), in her book The Silo Effect, finds that, “the least questioned assumptions are often the most questionable”.
The trouble is that managers find the questioning of their most basic assumptions of organisational life difficult. Managers dislike the double challenge of questioning their basic assumptions of what are legitimate forms of work, how to organise work and the threat to their position, status and security within the organisation that goes with it.
‘A fish would be the last to see water’
I have worked with a number of organisations where the project was theoretically to facilitate change, but in actual fact there was little genuine desire to change. Many professionals are so familiar with their focus upon efficiency and optimisation that, as Argyris puts it, “…whenever their single-loop learning strategies go wrong they become defensive, screen out criticism and put the ‘blame’ on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it most.”
Working with a global media company in 2016, it was shocking how managers insisted that a dramatic decline in sales, and a staff turnover rate of 30 per cent, were due to people not working hard enough.
When introduced to a technology company developing a mobile app to replace its old process-based services, managers dismissed the innovators as “small fry”.
As the situation became increasingly critical, the CEO was told by the HR director that this was a strategic problem, to which the HR Director was told, “Stop talking about strategy. I know all about strategy. I have read all the books. Go do what HR people are supposed to and interview some people and fix this problem.”
As Ralph Linton wryly noted, back in 1942 in his book The Study of Man, “a fish would be the last to see water”.
Similarly, in 2004, Eric Bonabeau found that, “the homogenising nature of best practices can destroy value for corporations, which forget that strategy is, at its heart, all about differentiation.”
Embracing the double loop
Double-loop learning is about thinking beyond the execution of tasks and how they could be made more efficient that characterizes companies such as the company described above. As such it defines management as rooted in critical thinking, dynamic execution, and adaptable mindsets with a tolerance for high levels of ambiguity.
My experience supports Argyris’ findings that whilst managers understand double loop learning intellectually, in practice, they find it very difficult to actually do.
Learned emphasis upon operational efficiency, quantitative performance targets and the fact that technology provides ever more scope for interruption combine to create a culture that mitigates against critical questioning of assumptions.
The expression used all too often by managers is that they simply don’t have time. Whilst this is clearly placing a glass ceiling upon their individual careers by limiting them to purely operational roles, it is also holding back organisational growth.
In disruptive times it is not enough just to work existing best practices and processes harder. As Gillian Tett says in her book Anthrovision, “we must look at our own world with the lens of an outsider to see ourselves clearly”.
Of the many organisational problems that I come across in my consulting practice, single loop learning is by far the most prevalent cause of most of them. Overworked managers simply become so wrapped up in their mastery of best practices that keep them afloat, amidst a constant stream of operational demands, that they stop questioning them.
The desire to convey competence, driven by shortages of time and career ambition becomes unquestioning conformity to existing norms and practices.
The fundamental problem with digital disruption is that because it changes the nature of market dynamics it creates a level of complexity that goes beyond most managers’ experience or preparedness.
Managers are trained and are used to applying best practices. However, digital disruption succeeds by challenging existing best practices and rendering them irrelevant. If you want to survive and thrive in these turbulent times, learning to escape single loop learning will be the key driver of how you are, or are not, able to adapt.
Taken from the forthcoming book All In: An Executive Guide to Complexity & Digital Disruption by Andrew Taylor and Raluca Bochiș, University of Buckingham Press.
Photo: Dreamstime.
