The Lab

The fruits of riotous experimentation.

Can you handle the truth - part II

In ‘Can you handle the truth - part I’ I referred to the conceptual importance of feedback loops. In part II I relate a practical, personal example of how deployment of a mechanism for feedback built sufficient trust and honesty for an organisation to re-adjust the corporate strategy .

Our approach to strategy process has four parts:

1. Build a clear understanding of what is currently happening in the market place and from this generate a sense of direction for the market. Within this lay out your desired position for the business within it. Not that we are proclaiming it should be an idealised view of the future, quite the reverse. The desired position could be very fuzzy, and our clients sometimes refer to this end point as a guiding post; a sighted point which provides a sense of direction which does not dictate the routes to be taken.

2. Use narrative research to obtain a frank and brutally honest picture of the organisation. This is a much richer and deeper assessment than simply answering the questions, “what are our core competencies?” or “what is our USP?”

3. Construct a number of “possible path forwards” (PPF’s) emanating principally from starting rather than backwards from an idealised future, but still guided by the customer-influenced, guiding post. The composite actions required to execute the PPF’s are then placed on the Cynefin framework, and the appropriate tools are then deployed to take the actions forward.

4. The context relevant form of feedback loops are then put in place to guide the execution.

I have seen a big shift in our strategy generation process over the past 3 years, and a concomitant increase in our clients comfort in the ambiguity attendant in managing complex problems. Perhaps the biggest change has been the acceptance that the future state can be fuzzy, but there is still a great reluctance to invest time in understanding the current position, and dread at having to establish the safe-to-fail climate necessary to probe future paths forward.

For example. I was retained by the CEO of a medium-sized technology business to support his team in a strategy generation process. The CEO was confident that he had already constructed the right strategy, but was looking for us to test it, and subsequently create ownership amongst the leadership team.

The strategy called for a high level of product innovation and supporting output metrics had been proposed eg 25% of sales from products that had not been in the portfolio three years prior. This seemed a super human achievement given the typical lifecycle of a product in the industry was 10-15 years. In addition, all the water cooler conversations pointed to an organisation that was built for operational efficiency, not for funky new product development—but nobody would tell the CEO. I tried to raise the feedback with the CEO but was quashed. It was close to a Palchinsky moment!

I decided to try my own ‘safe-to-fail’ experiment and introduced the concept of narrative research. I proposed that we employ the method internally at first, as this would introduce the concept safely, and give confidence to eternal deployment thereafter. With some reluctance, the proposal was accepted.

I interviewed the top 50 managers, and asked them to provide anecdotes on the mode of innovation used the organisation. One of the signifiers asked the managers to record whether their anecdote suggested a culture encouraging or discouraging radical innovation. The results showed a climate that was fiercely orientated toward fail-safe activities and thus the levels of new product innovation required for implementation of the new strategy would never be achieved unless there was a seismic shift in culture.

This data was presented to the CEO who, at first, defensive and prickly. However, he was self-persuaded when he read the anonymous anecdotes, and the outcome of the study was four-fold:

1. It convinced the CEO that the current strategy was undeliverable and needed to be modified.
2. It highlighted to the CEO and the management team that a crucial feedback loop between with the two needed, in the CEO’s words, “an angioplasty.” 
3. Reinforced to me that the principal blockage to strategy execution is often an inaccurate perception of the starting point , rather than an overly ambitious end point.
4. Narrative research can be very, very powerful.

Cynefin. SenseMaker. This stuff works.