Black Swans Can Inspire A New Era of Innovation

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight

Back in November I was listening to a talk from Melissa Sterry, the Design Scientist and Systems Theorist. She was challenging the conventional wisdom that a child born today would live until they were 100. “How can we say this?” she said. She went on to explain the complex system disruption caused by events like climate change and proposed that there was no guarantees about anything – as new diseases would emerge with strains capable of igniting pandemics. 

The nature of our connected world provides the ideal base for new entrants to spread and scale  – as facts, predictions, opinions and lies intermingle across all forms of media, creating viral opportunities to spread fear—and overrun the science that should guide communication as well as action.

My original post on risk probability admittedly downplayed the seriousness of COVID-19, and in the intervening weeks our entire lives have been turned upside down. Arguably we are living through a black swan event that will change the course of our lives.

Black Swan theory was popularized in a 2007 book by author and former options trader Nassim Nicholas Taleb. The book – written a year before the financial crash – focuses on the extreme impact of rare and unpredictable outlier events — and the human tendency to find simplistic explanations for these events, retrospectively.

Why a black swan? Well , for centuries people agreed that swans were – of course – white. That was until black swans were discovered off the coast of Western Australia in 1697 by Dutch explorers. The only reason people were convinced swans were white was because they’d never seen a black one.

Never confuse the absence of evidence with evidence of absence.

Taleb has recently stated that Coronavirus doesn’t fulfill the definition of a black swan. Indeed, pandemics have been at the top of national risk registers for decades and our culture is full of apocalyptic visions of the future , with zombies rather than viral infections admittedly . Some have argued that the correct metaphor for the crisis is a “gray rhino,” which refers to highly probable but neglected threats that have an enormous impact. It was coined by Michele Wucker,  who recently said “Given what we know about pandemics and their increasing likelihood, outbreaks are highly probable and high impact. I coined the term “gray rhino” for exactly such events: obvious, visible, coming right at you, with large potential impact and highly probable consequences.”

In terms of attempting to predict future disruptions on your business it’s useful to make this distinction:

  • High Impact, Highly Improbable Crises
  • High Impact, Highly Probable Crises. Coming right at you. 

And yet – out of this darkness can come a period of opportunity.

Wars and other crisis events can have beneficial effects on innovation and technological development. For example, wars tend to accelerate technological development to adapt tools for the purpose of solving specific military needs. And later, these military tools may evolve into non-military devices, such as radar or even the internet itself.

Additionally , the fact that we are now living in ways that are highly irregular to us , puts us in a far less passive and more creative state. We are experiencing a mass perspective shift that could lead to new thinking and new opportunities.

In this short video clip David Snowdon talks about the troubled Apollo 13 mission. Snowdon explains that for innovation to happen three conditions need to be in place: starvation, pressure, and perspective shift.  In terms of the current situation, we are being starved of our usual way of working and living, we have a pressure to maintain the services we provide and our perspectives have shifted towards self-isolation, limited social contact and the stark realities of covid-19.

As Simon Penny writes “perhaps during this time of isolation and slow living, we might gain a fresh perspective on what’s really important, and paradoxically our social distancing might actually bring us all closer together”.

In the past week I’ve spoken – actually spoken rather than text – to family and friends more than I have in the preceding year. I’ve spoken to neighbours who I’m ashamed to say I didn’t even know the names of.

When life returns to ‘normal’, we may never go back to living and working in exactly the same ways we did before. In fact it would be a collective failure if we were to do so. 

Whatever happens during the Coronavirus post-mortem we have to accept a couple of things:

  • We must getting better at preparing for high frequency, high impact events
  • We have to get better at understanding and reacting to exponential growth across complex systems.
  • We must understand that we’re all connected. In a globalised , perma-connected world we are all linked by increasingly close chains of acquaintance.

In the midst of a pandemic it’s sobering to be reminded that we can look after each other best by just thinking globally and acting locally.


 

Image by Alina Kuptsova from Pixabay 

What If We Replaced All Our Managers With Robots? 

Most of what we call management consists of making it difficult for people to get their work done

Peter Drucker

Management is the greatest inefficiency in any organisation.

Many of you will be familiar with the work of Gary Hamel , but his explanation of how management ‘spreads’ is always helpful.

Typically a small organisation might start off simply – one manager and 10 employees. 

But as it grows it will often keep this ratio and sometimes reduce it. So an organisation with 100,000 employees will have at least 11,111 managers. Because an additional 1,111 managers will be needed to manage the managers.

And that’s before you go near management related functions whose entire function is , well , management.

Most of our organisations are focused on growth rather than remaining small and simple. More people inevitably means your coordination and communication problems magnify, the management hierarchy multiplies, and things get more complex.

Research shows that every time the size of a city doubles, innovation or productivity increases. However, exactly the opposite happens with organisations. When companies get bigger, innovation or productivity per employee generally goes down.

This is why companies which grow quickly get into trouble. A fast-growing company can go from 20 to 400 people without changing anything about how they work. What works in an organisation of 200 people simply doesn’t in an organisation of 2000.

Globally, our employees crave more autonomy and less bureaucracy. However, there is currently a gap between wanting autonomy and flexibility, and getting workplace autonomy and flexibility.

And the reason it’s difficult is this: it’s impossible to dismantle bureaucracy without redistributing authority. Hierarchical and status-obsessed cultures necessarily militate against relationships based on equality, empowerment and collaboration.

Most of our organisations don’t redistribute authority, they accumulate it.

So what if we replaced all the managers with robots? 

As Simon Penny writes for Bromford Lab, at the moment we’re either 100% human led or just starting to explore the possibilities of having machines support decision making.

Simon points out that humans are particularly bad at making decisions. Our decisions are largely emotional and often illogical, which can lead to inequity, data bias and bad outcomes. Having a machine help us make decisions more efficiently actually makes a lot of sense. Who says they wouldn’t be better than managers?.

The Mystery of Miserable Employees

In an article for the New York Times, Neil Irwin explains how a team at Microsoft used data rather than managers to figure out why a business unit had such poor work life balance. The issue was that their managers were clogging their schedules with overcrowded meetings, reducing available hours for tasks that rewarded more focused concentration. Rather than leaving it to managers to solve the problem the team deployed a Microsoft Office feature called MyAnalytics which allows users to receive nudges when their actions don’t line up with their stated goals. A bot notifies you about how much focused time you had, or how many hours you were on email.

Just like wellbeing trackers like Fitbit, rather than doctors, are nudging people to improve the quality of their sleep, we’ll see algorithms, rather than managers, nudging us to be more productive at work.

To keep teams productive and happy, managers need to master the basics: don’t overwork or expect others to; hold frequent 1:1s; make cross-functional connections; and of course, keep meetings on time and inclusive. All tasks perfectly suited to a robot.

We Are All Managers Now

Like it or not we are headed in a direction of either performing human focused work (social, health workers, coaches) or performing deep non-routine knowledge work. All other tasks will be automated at some time in the near future.

It will happen slowly:

  • Things like Robotic Process Automation will begin to undertake the systematic and behind-the scenes jobs
  • AI will complement this software to add thought, judgement and intelligence
  • You’ll be told by a bot what the optimally productive length of the workday is for you.  You’ll be advised whether it makes sense to focus on deep contact with a few customers or much looser relationships with a wider community
  • Monitoring tasks (hours worked, productivity) will be democratised and we’ll be self managing using nudges and prompts – developing the interpretive skills to understand what data is telling us.

The automation of these routine tasks will allow people to focus on ideas, innovation and higher-value work.

Management has been responsible for a lot of disengagement with the workplace. This multi-tiered management model piles inefficiency upon inefficiency. Decision making slows. People become less empowered.

Robots will replace most managers before they replace front-line workers. But it won’t happen overnight and won’t even feel uncomfortable.

If we design it sensibly and ethically, the organisation where you are your own boss could be less cumbersome and costly – leading to a much happier and productive world of work.


 

 

Image by Jin Kim from Pixabay 

 

Why We Are So Bad At Defining Problems

If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions. – Albert Einstein

I don’t know whether Einstein ever used those words. It may be just like the Henry Ford “Faster Horses” quote – something perfectly phrased and also perfectly true that no-one actually ever said.

Whether he said it or not, Einstein believed the quality of the solution you generate is in direct proportion to your ability to identify the problem you hope to solve.

And of course he was right, you can’t really solve a problem you don’t fully understand. “If you can’t explain it simply, you don’t understand it well enough”. Another quote he (probably) didn’t say.

Either way, 60 years after his death, many of our organisations have still failed to learn his most valuable lesson. So what is so difficult about problem definition?

Many of our organisations have set the climate for solution focused rather than problem defining behaviours.

A solution focused culture is exacerbated by the following conditions:

  • Leadership putting pressure on finding quick fixes and the realisation of short term goals – rather than long term impact
  • Discussing problems, or considering that organisation itself may be part of the problem, is seen as taboo or a sign of weakness
  • Management falls in love with a solution too easily even if it’s not solving the problem at hand
  • An implicit assumption that leaders have all the answers. “Let managers manage and get on with it”
  • A lack of evidence based enquiry – which allows bullshit organisational ‘facts’ to circulate and obfuscate true problem definition

In my work over the past five years, since I’ve given up having any operational responsibilities, I’ve seen how easily we can all lapse into solution focused work.

Unlike Einstein, when given an hour we often spend – at best – 5 minutes on the problem and the remaining 55 minutes solutionizing.

Our+Approach+To+Design++-+Simon+Penny+(7)

As Simon Penny writes in a great piece for Bromford Lab “when we talk about design we are using it as shorthand for 4 key elements of problem solving activity – discovery, definition, development and delivery. That means that at least half of what we do is based on truly understanding and defining the problem we are trying to solve and the other half is based on developing, testing and iterating ideas into a scalable solution. In short, we think about design as a whole end-to-end process”.

So rather than seeing problem definition as a one off activity, it’s now what we do all the time, objectively helping the organisation to solve the right problems and resist its inbuilt solutionist behaviours.

The five step approach to problem definition

1 – Establish the need for a solution

This sounds completely obvious but just because you’ve seen or thought of a solution doesn’t necessarily mean one is actually needed.  Starting with a high level question of “What problem are we trying to solve here?” and being very clear about it is a good starting point. You’ll usually come up with a lot of further questions – so don’t even bother trying to fully define the problem at this point. There may not even be one.

2 – Match the problem to organisational strategy

Even if you’ve established the need for a solution – it may not be one your organisation is best placed to provide. No organisation, large or small, can manage more than five or six goals and priorities without becoming unfocused and ineffective. The best organisations don’t try and do everything. They focus on trying to solve fewer problems, in better ways.

That involves finding your ‘irreducible core’ of services and then constantly refining and innovating against it.

It also means saying no to trying to solve everyone else’s problems.

3 – Explore the context to the problem

Often your problem will be one that the organisation has tried to resolve before. We rarely stop to reflect on why our previous efforts failed and what we should avoid this time.

If the problem is industry wide, it’s crucial to understand why the market has failed to address it, and whether it is even feasible.

4 – Writing the problem statement

Now you’re ready to write something down. A problem statement should describe the undesirable gap between the current-state and future-state. It should avoid any mention of a solution and be no longer than a tweet.

5 – Initial prototype solution

As Simon Penny also wrote here , prototyping can also be used to test an idea; not by creating a smaller working version of a service or product, but by testing the many different component parts or even thinking abstractedly in order to start to uncover what it might feel like to use the service or product. This can be tested – with people – to help you further refine the problem. Thinking of prototyping as part of the problem definition helps you avoid falling in love with your first idea.

All of this takes time , and this is why our organisations are bad at it.

Falling in love with the problem , rather than the solution means:

  • Accepting your first idea could be the worst idea – and might be wrong
  • Being brave enough to pull the plug when you realise you’re not the ones to solve it
  • Becoming comfortable with failure – as the only way you’ll ever explore a problem worth solving is through a ‘try, fail, learn and try again’ model.

When you truly fall in love with problems, not solutions, you not only stand a better chance of solving them. You also start unlocking a path to a better, less complicated organisation.


Footnote:

By the way – it is possible to argue you can solve problems without first defining them.

I’m currently travelling and it’s inconceivable that we once had to carry suitcases. The first wheeled luggage was invented by Bernard Sadow because he had a bad experience in customs returning from Aruba. Struggling to carry his heavy luggage, he observed an airport worker effortlessly rolling a heavy machine on a wheeled skid. The rolling suitcase was born.

That’s not how our organisations work though. If the eureka moment was so common place we’d have solved most of our most intractable problems by now!

The Social Sector Must Rebuild Trust Through Equal Partnerships


This is a edited version of an article originally written for Inside Housing


There is a growing realisation that many of our social institutions and public services have run their course.

Communities need something different from what’s currently on offer.

We could be at the tipping point, the moment when future relationships between citizens and institutions become placed in a wholly different context.

There are a number of factors that seem to be converging. There’s the post-Grenfell concerns about safety and cost cutting, there’s the global decline of trust in institutions, and there’s an increasingly vocal public discourse emerging that highlights individual social sector service failures.

Combine all this with a perception that many social sector organisations have become untethered from their roots in the community, and you have the perfect storm.

Tipping points are not reached by just one factor alone, rather a series of connected incidents that suddenly bring about widespread change.

It’s necessary to note that this is not just a crisis limited to the one individual sector. The Civil Societies Futures report outlines how the world has changed, with people becoming more unequal, more disconnected from power and more divided.

The message here is clear: if we do not respond to people and communities’ desire for power, we will lose our legitimacy and the essential foundation for everything we do.

Back in March I took part in a discussion hosted by Inside Housing with Lizzie Spring. There was a lot I took away from the conversation but it can be condensed into two main points.

Firstly, the language used by ‘professionals’ is damaging to relationships built on trust. What social media does very effectively is highlight where friction occurs. Nowhere is that friction more evident than when people in housing, health and social care cast themselves, often unintentionally, as professionals and experts to be listened to.

This behaviour can give off the impression of an exclusive club, populated by those in the know, who are using their exclusive access (and exclusive language) to solve problems and design services on behalf of citizens. It implies a them and us, and reinforces an already unequal distribution of power.

Secondly, the core problem many organisations senior staff and Boards appear to struggle with is an entrenched inability to trust citizens. As Lizzie has said “I can’t consider trusting them, when my own intelligence, experience and expertise are discounted.”

We need to move away from focussing on what’s wrong, and seek to solve problems with communities not for communities

Let’s not underestimate the extent of the change that the social sector must embark on to address this. To be trusted means being trustworthy – and to achieve that you can’t dodge the question about power.

As Simon Penny writes for Bromford Lab, there are important issues to discuss about the redistribution of power including greater transparency, collaboration, participation and accountability.

If we don’t talk about power we’ll just continue to address the symptoms, rather than tackle the root causes of mistrust. We risk encourage providers to seek comfortable solutions to things they should be doing anyway rather than address deep institutional dysfunction.

Hierarchical and status-obsessed cultures necessarily militate against relationships based on equality, empowerment and collaboration. These organisations don’t share power, they accumulate it.

There’s often no way for citizens to contribute or influence organisations other than ways set out by the organisation itself. When only one partner sets out the rules of engagement the game is set for a very unequal relationship.

The most important thing all organisations could do right now is simply demonstrate they see themselves as equal partners. Importantly that demonstration should only be through actions, not through a carefully coordinated communications campaign.  

There will be no silver bullet to these problems.

The answers may include exploring alternative models of management. They may include more radical models user involvement – perhaps using emergent technology to move to complete transparency, with people able to shape decisions at both local and strategic levels.

We are seeing change though. A conversation is beginning to happen on equal terms in shared spaces like social media. We need to take that conversation further into our communities and into our offices, not hidden away with one party excluded.

Traditional participation methods have failed us.

Involvement on the terms set out by the NHS, by social landlords, or even by Government, is no longer the only game in town.

 

Ending The Myth Of Collaboration

The best organisational cultures are tolerant of the loner, the thinker. – John Wade

“If I was you,” said a colleague recently “now would be a very good time to involve customers, to get more people involved”.

No, I thought, right now that would be the worst thing we could do.

Collaboration can kill creativity.

Most people in your office have nothing or very little to do with your work, yet collaboration with them – all the time – has become conventional business wisdom.

It’s partly this that has led to us all being meetinged and emailed to death. The mantra of sharing your work and involving everyone in decisions naturally leads to inviting and copying people into things that add no value to them, or you.

If you’re looking to be brave and do something entirely new, involving more people at the wrong time could kill your idea.

Work at MIT found that collaboration—where a bunch of people put their heads together to try to come up with innovative solutions—generally “reduced creativity due to the tendency to incrementally modify known successful designs rather than explore radically different and potentially superior ones.”

Businesses love the idea of this kind of ‘brainstorming’ as it involves a lot of people, is visible, and is seen as a quick route to solving a problem. There’s precious little evidence though that it produces any results.

meta-analytic review of over 800 teams indicated that individuals are more likely to generate a higher number of original ideas when they don’t interact with others.

As Tomas Chamorro-Premuzic writes ‘brainstorming actually harms creative performance, resulting in a collective performance loss that is the very opposite of synergy.’

Solitude: The Benefits of Being Alone

Few businesses place any value on purposeful thinking – as ‘thinking about stuff’ looks too much like loafing about. We are in a world that places a higher value on being busy than on thinking – but genuinely great companies only obsess over productivity – never busyness.

Pauls Slides (1)

Many people are at their most creative during solitary activities like walking, relaxing or bathing, not when stuck in a room with people shouting at them from a whiteboard.

Indeed a study found that “solitude can facilitate creativity–first, by stimulating imaginative involvement in multiple realities and, second, by ‘trying on’ alternative identities, leading, perhaps, to self-transformation.”

Essentially just being around other people can keep creative people from thinking new thoughts.

Solitude is out of fashion – possibly because of its association with the physical and emotional effects of loneliness – but any business that values creativity should be considering how it can get better at keeping people apart.

The Value of Introverts

People who like to spend time alone, or who are less comfortable in group situations, are decidedly at odds with today’s team-based organisational culture.

The danger is that with a focus on all-out collaboration you miss out on the creativity of introverts.

When I started group facilitation I learned two things very quickly:

  1. Introverts have some of the best ideas but often don’t feel very comfortable talking openly about them in a group setting.
  2. Extroverts are only too willing to share their ideas (in fact they rarely shut up about them) but are sometimes reluctant to listen to good ideas proposed by others.

Avoiding Mediocrity by Committee

As Simon Penny and Michelle Butler write knowing when, and when not to, involve customers and colleagues is key.

Once you’ve unearthed radical ideas from people, they need nurturing. They need protecting from group-think meetings and committees who largely express speculated unevidenced opinions based on current preferences from past experiences.

Design thinking has a bias towards action: it resists talking yourself out of trying something radical. Creating prototypes helps you to think about your idea in a concrete manner, and get it to test before it gets dumbed down.

At Bromford Lab, we’ve learned:

Collaboration is useful when you are:

  1. Dealing with complex problems that require multiple ‘expert’ opinions.
  2. Getting buy-in. People are more invested in an idea when they were involved in defining the problem.
  3. Dealing with strategic issues. The more fundamental the issue is to the organisations purpose the more essential collaboration becomes.

Collaboration isn’t useful when:

  1. You need to really think about things. This benefits from solitude and purposeful exploration.
  2. You need to be really radical. Truly disruptive thinking happens in very small deviant groups.
  3. You don’t have time. When you have a burning platform or require an immediate decision you’re better off being autocratic than wasting peoples time through ‘involvement theatre’.

The myth is, you have to collaborate all the time.

Inclusivity has its limits.

More is not always merrier.


Photo by James Pond on Unsplash

How Do We Know Our Organisations Are Really Succeeding?

Every day, organisations promise to make the world a better place.

How do we know they are really succeeding?

The National Health Service we are told is the world’s best healthcare system.  Yet the NHS has a poor record on one fairly important indicator – actually keeping people alive.

We often hear that housing associations prevent homelessness , but in the 50 years since Cathy Come Home rough sleeping has increased from about 965 people each night to over 4000.

We have a ‘world class legal system’,  but at the end of last year 77 of the 117 prisons in England and Wales were overcrowded.  By contrast the Netherlands has a shortage of prisoners , and is turning prisons into boutique hotels and temporary homes for refugees.

Perhaps it’s time to move away from soundbites and spend a little more time at the source of the problem.

 

1600x-1

Health is an interesting one – there’s a big difference between quality and availability of healthcare and actual outcomes. The UK ranks only 23rd on the Bloomberg Healthiest Countries list.  Another report by the Nuffield Trust indicates that, compared with other countries, the UK’s healthcare system is no more than ‘better than average’.

Italy , with plenty of doctors in the country and a diet full of fresh vegetables. fish and lean meats, is the place to be. Maybe it’s easier to solve problems with pasta and olive oil?

The issue of course is that problems like health, housing and offending fall into the category of what Professor Horst Rittel termed ‘wicked problems’.

Wicked problems are difficult to define. Many possible explanations may exist. Individuals perceive the issue differently. Depending on which explanation you choose, the solution takes on a different form.

Tame problems, by contrast,  can be clearly written down. The problem can be stated as a gap between what is and what ought to be. There’s usually pretty easy agreement about the problem definition.

Tame problems might still need a high degree of creativity to approach – but they are ultimately solvable – often by one organisation acting alone.

Wicked problems on the other hand aren’t amenable to a single organisation with its top down instinct to define, analyse, dissect and process.

And that’s why more money for the NHS won’t make us any healthier, and more prisons won’t stop reoffending. And if you want to solve homelessness the worst thing you could do is create more housing associations.

Simon Penny (who I’m delighted to say is soon to join Bromford Lab) writes that many of our trickiest social issues can be thought of as wicked problems because of their complex nature – and this means that finding solutions to them often isn’t easy. Especially in a world where organisations and even internal departments act in isolation.

The chance of solving wicked problems whilst acting alone is virtually zero.

The issue we face is that many of our organisations are driven by top down metrics that attempt to solve things through quite a narrow lens. Because we don’t employ a rigorous process for understanding the dimensions of the problem, we miss opportunities to address the underlying strategic issues.

This gives our organisations the illusion of solving problems – but we rarely do. In fact we often create more problems for others.

Wicked problems are forever interconnected. You can’t solve them at organisation or even sector level.  The challenge is connecting the various players and closing the gaps.

Perhaps if we stopped thinking of people as problems to be solved we’d turn our organisations upside down.

There are problems in communities but there are even more opportunities.  Even if people do need ‘help’ they are just as likely to find what they need from a friend or a neighbour as they are from a ‘professional’.

Oh, and before you pack your bags and leave for Italy, consider that it too has failed to join up problems. Youth unemployment – at a staggering 40.3% – is twice the European average. It’s saddled with one of the world’s highest debt loads and most of those doctors that have kept the country so healthy are nearing, or even past, retirement age. The country is sitting on a time bomb.

The problem you are tackling today doesn’t start with your organisation,  and neither – so it seems – does the answer.


 

Photo Credit: Anton Nikolov