The Game of (Business) Life

In John Conway's Game of Life, a graphical simulation game, complex life-like behaviour emerges from a set of very simple rules. It's mesmerizing to watch simulations of these rules, and see the intricate patterns that spontaneously develop, ranging from reproduction and movement, to oscillation and infinite growth. Two travellers repeatedly move back and forth between barriers, while shooting off a steady stream of floaters whenever they collide. Sophisticated behaviours emerge and the graphical objects demonstrate different strategies for surviving within the system of rules. If you change the rules, those same strategies no longer work, and different strategies must emerge.

The same idea repeats in the Game of Business Life, in the way things happen within our organizations and communities:

1. We set up an environment with a bunch of rules.

2. We let people exist in this environment for a while.

3. Stable behaviours spontaneously develop that help people survive in this environment.

In Saskatoon, landfill rates have been increasing to reflect increasing costs. The idea is to pass the costs of running the landfill on to those who actually use it. Unfortunately, a different behaviour emerges as people seek ways to thrive in this system of rules. Instead of hauling things to the dump, a chronic problem has emerged as people dump appliances, chemicals, building materials and garbage in the ditches and sloughs surrounding the city.

This free dumping behaviour naturally emerges from higher landfill rates, but it's obviously not desirable. From one slough by our acreage, we've hauled out a mattress, a basketball net, a barbeque, car tires, bundled tree branches, shingles, lumber with nails sticking out, a dishwasher, and an organ. We recently had our dogs covered in sticky black tar that someone dumped in the water, requiring a trip to the vet to sedate them and clean the tar off their fur.

Similarly (except for the sedation part), service reps in a call center were rewarded based on how many calls they handled. The idea was to encourage employee eagerness to handle customer calls, to improve service. The actual behaviour that emerged was a dramatic shortening in average call time, as service reps routinely ended calls early and transfered them to someone else, allowing them to handle more calls but also resulting in much poorer service and unhappy customers. This emergent behaviour allowed them to maximize their income and avoid their manager's criticism and was a natural response to the environment.

As leaders, we create the environment, with rules and measurements and rewards. Our people adapt to this environment and adopt behaviours that are "natural" for the system of rules we've set up - behaviours that allow them to thrive and survive. Leaders then struggle to foster other, more-desirable behaviours, but since they're unnatural for the system, they require constant scrutiny and constant input of energy and effort to maintain.

Given an environment of pay, reward and reporting, people will adapt their behaviours to survive in that environment. How much easier it is when the environment fosters the behaviours that we actually want.

So You Think You Can Succeed (On Purpose)

Do you believe that you can deliberately achieve success in your business? Do you believe in the five principles of THIS, or the seventeen steps of THAT, or the highly-promoted solutions of THOSE GUYS? Are there steps you can follow that will lead you on the path to the promised land? Is there some kind of organizational physics that we can master, principles that will guarantee our upward progress. Can you, on purpose, change your good into great?

If you truly believe you can, the first thing I'll ask you to do is to invest heavily in Dave's Unicorn Ranch, because it's just as likely to succeed. Then, I'll suggest you think about some of the Olympic athletes who didn't win any medals in Vancouver 2010.

Consider Anton Kushnir of Belarus, top-ranked aerials jumper in the 2010 season, who didn't even qualify for the finals. Consider Dominique Maltais, a Canadian favourite for a medal in snowboarding, who didn't even qualify for the final. Consider South Korean speed skater Lee Ho-Suk, the reigning world champion, who fell in the last seconds of the 1500m short track, losing an almost certain gold medal and walking away with nothing.

It's obvious that these athletes had a clear purpose to win gold in Vancouver. They were thoroughly prepared, thoroughly capable, and they did everything necessary to win gold. Other than actually win it, of course.

Unfortunately for my unicorn ranching prospectus, and for a lot of fad-chasing managers, there are no formulas to guarantee success. Business success is not about formulas, about best practices, about the latest management fads, or the latest magic technology. There's nothing you can do to guarantee the success of your company.

You could start 100 identical businesses, all using the same principles, the same processes, the same products, the same management styles, the same technology and the same strategies. After a few years, some of them would have succeeded wildly, and some would have dissappeared. Though they might all start out with the same purpose and the same prescription, some would thrive while others would die.

So does this mean we should give up hope, shut down the business and get jobs as Walmart greeters? No. But it does suggest that we get a little more educated about some things like complexity, randomness, risk, and adaptability. It does suggest that we need to realize business is about making judgements, based on data and theory. About making judgements in a world of risk and uncertainty. About helping our people to do the same.

And it does suggest that we need to stop evaluating our judgements based only on how things turn out. It is quite a stretch for most of us to realize that we can make the exactly right decision, yet still lose. Do all the right things, yet still fail.

If we re-ran the Olympics immediately following the closing ceremonies, do you have any doubt that most of the events would turn out differently? Athletes that failed to qualify would win gold, and athletes that won gold would fail to qualify. And, try as we might, we wouldn't be able to point to the reasons for the different results. This is what complexity, variation and the real world are all about.

So, make the best judgements you can and move forward. And, be cynical, very cynical, of anything that claims to guarantee your success.

Finally, please make your cheques payable to Dave's Unicorn Ranch - a guaranteed investment (for me, not you.)

Which is Better, an Author or a Reader?

An executive recently expressed a lot of pride in the author/consultant they had engaged to speak to and consult with their telecom company. "They've written a book!" is given as the definitive justification for choosing this particular person. Yes, published authors are naturally embued with credibility; they become our go-to heroes, the guru of their particular area of expertise. We want to believe that this author, this consultant, with their straightforward, focused approach will be able to fix our issues.

Yet, this same executive, with a little more conversation, readily admitted that the issues they were dealing with were complex and far-reaching. They didn't even really understand what their problems were, yet they were confident that an expert (an author no less!) would be able to fix them.

When problems are complex, when causes and effects are widely separated in distance and time, when problems are emergent, arising out of your underlying systems and policies - in other words, in the real, messy organizations that we work in - there are NO experts. Nobody "out there" knows how to fix your problems.

As a leader, you are far more effective if you have read and integrated the wisdom of eighty books, than if you rely on someone who has written one.

Fluid and Graceful

The CEO of a private health care firm recently described the turmoil of trying to implement an H1N1 vaccination service for their clients. Daily, even hourly, the sands would shift beneath their feet as supply issues, union issues, legal issues, and public opinion issues forced unpredictable change upon them. They in turn had to communicate repeatedly with clients and staff as the plans changed in ways beyond their control. As the situation shifted yet again, the CEO described dancing down the hallway, spontaneously modelling the need to be "fluid and graceful" as they collectively adapted to the continuing chaos of the situation.

This is a beautiful example of a complex situation where planning becomes useless and our illusion of control disaappears. Even the smallest wave on the ocean has more power than you can possibly influence, and when a storm rises, the waves become overwhelming, completely unpredictable, and far beyond your control. What can you do, if you aren't in control? What should you do, if you can not plan?

In times of chaos, of turmoil, of large unpredictable forces, you need an organization that is fluid and graceful, that can dance on the waves, and adapt quickly and easily to whatever the situation throws at you. You need engaged people who trust each other, who know how to work together, who understand that this Will Not Go As Planned.

We've all heard the truism that Failing to Plan means Planning to Fail, but we need a different approach when we are facing complexity. In the words of Margaret Wheatley, "In these troubled, uncertain times, we don’t need more command and control; we need better means to engage everyone’s intelligence in solving challenges and crises as they arise."

We need to learn to dance.

(With thanks to Debby Criddle, CEO of Nightingale Nursing Group)

Hunter? Gatherer? Why Expert No Solve Complex Problem!

Mighty hunter! Expert! Use skill to hunt problem and kill it. Know answers! Figure out answers! Big knowledge! Take problem apart! Find cause and effect! Troubleshoot!

Experts, with their deep domain knowledge and authority, are unmatched in their ability to solve focused problems, problems in their area of expertise. The problems they solve aren't necessarily easy, and may in fact be extremely intricate and involved, but the problems are essentially simple in a structural sense. Think of a surgeon. You want a surgeon with expertise, with experience, with deep knowledge about surgical techniques, about anatomy, with the skill to adapt to whatever they come across when they open you up. This is the domain of the technical expert. Is it complicated? Yes. Is it difficult? Definitely. Yet still, it is structurally simple - the expert deals with focused problems and develops the skill needed to deal with those particular problems.

But what about complex problems? What about problems where cause and effect is widely separated in time and place; problems where many people are involved, with diverse and conflicting interests and perspectives; where the future is unfamiliar and undetermined, where the territory is uncharted and there are no good maps? For complex problems, expertise isn't enough, and the expert's narrow focus is often a barrier to finding a path forward.

The experts within an organization don't see what the other experts see. Leaders don't see what the workers see. Workers don't see what the leaders see. Nobody sees what the customers see! The CIO thinks it's a technology problem, the CFO wants more cost tracking, the HR department sees it as a training issue, and the union thinks it's poor management policy. Many viewpoints, none of which sees the system as a whole, none of which can generate a new, emergent solution that satisfies all the stakeholders.

For complex problem, no get Hunter. Get Gatherer! Gatherer help people with understand each other! Gatherer facilitate! Gatherer get people holding stakes to see stakes other people holding! Gatherer help group make map, plot course! Gatherer help group shift situation, work together! Gatherer help answers emerge from group!

Me say enough!