Having read an earlier piece on culture and values, a colleague sent me a copy of report ‘THINKING THE UNTHINKABLE; A NEW IMPERATIVE FOR LEADERSHIP IN THE DIGITAL AGE.
Having written about the undesirable outcomes of risk taking, this report made me consider the positive consequences of risk taking.
In the same way the failures of 2008 can be seen as a cultural issue, this paper sees thinking the unthinkable as a cultural issue. I then thought how I should put this together. In other words, I began by looking at our exposure to risk taking and now I am finishing by looking at our over exposure to risk aversion.
The report is based on interviews with recently retired executives from business and senior public servants. Their view is that the understanding of risk and ‘unthinkability’ is ‘not broad enough’ for the scale of what now threatens.
They pose this question: how to create the ability to spot, identify and handle unexpected non-normative events. Experience may not help if what is hurtling down the tracks does not accord with your assumptions. In other words, our businesses and our institutions can be derailed by unexpected events. Especially when, what they call the attack surface is unprecedented – the speed of development in technology, demographic trends and geopolitical changes.
This report describes a general feeling in senior community. ‘There is clearly a sense of growing uncertainty, a sense of growing inability, a sense of lack of governance, a sense of lack of capability to grapple with these issues which show up without warning, all of a sudden.’
In order to build resilience to this type of risk in future ‘a new muscle is needed.’
The authors turn to the question of culture. They suspect that any of the following characteristics would not provide that new muscle.
- An inbuilt acceptance of systems and behaviours.
- A culture exhibiting conformity and risk aversion.
- Systems which reward ‘keep calm, don’t make a crisis.’
- Scripted and programmed compliant policies and procedures.
- Behaviours which are disciplined, conventional, hierarchical, conforming.
Furthermore, operational excellence and balance sheet control are not enough.
- They go on to describe that a combination of the following may help build that new muscle.
- Personal integrity and courage.
- A culture which allows risk of failure.
- A desire to try out and see what works.
- Behaviours which some might describe as disruptive, risk taking, challenging, confrontational.
- Systems which reward initiative, enterprise, innovation, flexibility and adaptability.
They pose the question as to whether this can be left to leadership as opposed to creating the sense of ownership across an organisation which senses and adapts which is plugged into two-way engagement tracking fast unfolding events.
And this means the removal of any obstacles to internal communications, it means shattering any cultural barriers that lead to conformity and it means collaborative networks which give access to widest possible sensors.
So it comes back to culture. How can you lead a company in one direction if your systems and behaviours point in another? Who is the ‘someone else’ who will take care of thinking the unthinkable?
What if there are people in the company, maybe the next generation, who are ahead of the leadership with smart visionary ideas. Does the culture suppressor surface?
Putting this together I get to the concept of cultural diversity. By which I mean strategic diversity - the ability to handle different kinds of challenges, to sense different kinds of information and process in different ways. Being open to the unknown as well as having systems of control. Building a vision of the future as well as relying on lessons from the past. And ensuring that these different ways of approaching strategic challenges are all represented and plugged into the decision making processes.
In my next piece I will cover strategic diversity in more detail. Having these diverse ways of thinking and decision making is one thing. Creating the right conditions for their formidable contributions to be brought into some kind of balance and rhythm is a challenge for leadership. Helping what can be a rough and tough drama become the means to sustainability is where mapping comes into play which will be my next topic.