Why organisations struggle with change

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• Complexity, uncertainty, emergence and interconnectivity require a different way of working in systems held in place by controls, performance indicators, rewards, structure and more.

• Symptoms of a failure to proactively adapt include avoidable failures and crises

• To enable business as usual to continually adapt proactively can be enabled by systemic risk intelligence.

 

For decades, management thinking and practice has been focused on reducing variation, setting clear rules and achieving targets.  This works, at least to a point, if the environment is well understood, is not rapidly evolving and does not include disruptive technologies or changes in social norms.

 

The reality for almost every organisation today is that only some of what we do can be managed well using traditional management methods.   Complexity, uncertainty, emergence and interconnectivity are realities for all organisations and demand a different way of working.

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Trying improve performance by working harder at ‘more of the same’ does not work.  This is like pedalling faster in the wrong direction. The fundamentals have not changed. We can of course, push this approach too far, either creating red tape or low-value processes or to try to control complex, intangible challenges that do not respond well to linear thinking or methods.  In either case, we end up with avoidable failures, frequent crises and more.

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Applied systems thinking has emerged over the last two decades, in response to this problem.  It recognises that human organisations are inherently complex systems, with many interrelated, intangible influences and with the tendency for unexpected outcomes to emerge. 

 

However for the truly complex challenge of proactively adapting to change, a step change is necessary especially for senior leaders and how they work.  Making that step change creates the potential for breakthrough performance not just once, but ongoing.   Proactive rather than reactive adaptation and innovation needs to become part of ‘business as usual’. 

 

Systemic risk intelligence lies at the heart of the ability to make that step change.  It is the difference between those leaders and organisations able to make the change, and those that are not able to do so.