Decision Taking in Organisations & the Long Run

I  recently read two  presentations  on decision taking (and why not decision making?) and long term thinking in a changing society (delivered in Berlin 2005) by  Arie de Geus  who is widely regarded as having pioneered scenario planning as a  commercial process (with his colleague Pierre Wack).  Arie  headed up Shell’s scenario and business planning division.  He is legend.  As a matter of interest, any of you who have read Joe Jaworksy’s Synchronicity will know Joe joined Shell to head scenario planning.

Shell is probably one of the few truly Level VII players and as a result of that does interesting things.  In 2008 when I was looking at the Working Journey of James Lovelock (an independent scientist who was chief scientist for NASA,  discovered CFCs and their link to holes in the ozone,  coined the concept and idea of Gaia and will be at the age of 96, Branson’s guest on Virgin Galactic’s first commercial space) he said he had been asked in the late 1960’s by  Baron Rothschild, Chairman of Shell  to write an essay on the prospects of Shell in the year 2000.  James says the essay stood the test of time, since he said Shell and other industrial companies would be so concerned with global pollution that they would be selling products that alleviated the pollution! Shell was also the only organisation that supported James’s work on Gaia. 

My own contact with this magic apart from James Lovelock,  was Clem Sunter.  Engaging, charismatic and comfortable with making accessible the long view of complexity, he was CEO of Anglo American and later Chair of the  Anglo American Fund.  Clem opened our Summer Workshop on Organisational Complexity. He  was part of the Shell Scenario planning  and brought this revolutionary game play to South Africa, then caught in the Apartheid quagmire.  He toured the country talking about “High Road and Low Road” scenarios,  presenting the most riveting hour and a half presentation (with nary an  overhead) and so the legend goes,  convincing President de Klerk and the Apartheid government of the need to release Mandela. Clem has written a number of books – including the Mind of the Fox and Scenario Planning.

Some Key Points from the attached;

• ·         Lift your long term planning – look into the future; think holistically. A longer term focus in a prerequisite for resilience, but beware, with long term strategies and thinking comes increased complexity. 
• ·         Consider multiple paths and options that lead into the future; create narratives, keep the accountants away – put your high potentials into scenario planning…
• ·         The real importance of scenario planning is that it stretches the time horizon of your company from one or two years, to ten or twenty years and increases the bandwidth of perceptions coming in from the “umwelt” (environments)
• ·         Decision making is a learning processes, needs to be fun and laughter tends to broaden the horizons
• ·        There are the routine and non-routine decisions – delegate the routine work to where it will be dealt with more effectively; don’t waste executive leadership on time on it….
• ·         The role of the Tavistock Institute (home to Elliott Jaques and many influential thinkers)
• ·         The intelligence quotient of the management team is equal to the lowest common denominator of the team –this applies to boards as well – the n and n+1 principle applies
• ·         Decision taking in complexity is speeded up by play and that it is a language based social process –
• ·         He talks about the why – questions asked at the Innovative Domain of work and above
• ·         The future is not predicted by financial figures, they are a record of the past – looking from our company outwards encourage engaging with the “umwelt” – the external world
• ·         Club of Rome report on limits of growth sparked of scenario planning – is there life after oil?  Ties back to James Lovelock’s paper.
• ·         As individuals are always thinking into the future…. Dwelling in the umwelt…  having a one track future means we filter narrowly, having executive teams doing this means you work at too low a level; again like boards
• ·         Capital is no longer the critical success factor – people are and managing talent requires far longer time horizons then predicting profit and loss and balance sheets and they are the key competitive advantage.
• ·         Use words accurately – sustainability is not what we do – we are trying to be resilient – sustainability is a zero carbon footprint and doing no harm.  There are no sustainable consumer companies but there are resilient ones…

If you want to read more go to  How Shell Oil used Requisite Organization Concepts to reorganize Shell around the world - John Hofmeister, VP Human Resources CEO Shell Americas – Video 2009 at the Global Organisation Design Society

 

Cheers

Andrew Olivier: The Working Journey

Resilience and Viability is NOT Sustainability.. it is a masquerade

During the course of the last few days I have become aware of the confusion surrounding "Viability" "Resilience" and "Sustainability"  Requisite Organisation likes definitions and so naturally this is an issue and here is why;

Resilience – “the ability to succeed over an extended period of time.” Resilience is  linked to strategy and execution, flexibility and being adaptive to changing environments, technologies and market needs.  Being a Requisite Organisation means you have a greater chance at being viable over the longer haul. Resilience is directly linked to Time Span of Decision making and the Work Theme of Strategic Intent. 

CEOs and MD's accountable at the Work Theme of Strategic Intent (Work Level V) are charged with the unique value add of direction,  viability and resilience.   CEOs at all levels are accountable for direction and viability but this may be measured year to year or even over the life of a three to five year strategy.

The reason that resilience is added to the accountability of a CEO or MD for  a Level V enterprise is that it has normally have been in existence for a decade or more, hence it has been resilient in adapting itself successfully to different changing landscapes (economic, social, political and technological).

 A level V complex structure takes time to evolve, it has a history, it has values and well known brand/s.  Resilience does not have the more short term connotations of viability.  That is also one of the reasons why Strategic Intent has a Time Span of Decision Making between five to ten years.  It needs to be viable and (the magic of the and) resilient.

But is I hate to say, resilience is not synonymous with Sustainable.

Sustainable is different from being resilient.  Sustainable means leaving no carbon footprint and doing no harm to the environment through conducting your business.  It means you put back what you take out and there is zero sum from environmental capital perspective.

For example - mining companies talk about being sustainable when they develop virgin jungle and develop ore ports in deep water natural harbours.  They can never redo that damage.  What they are doing is ensuring viability by finding new ore bodies.

Sustainability Programmes are actually Resilience Programmes.

Being resilient is not sustainable.  You can be resilient without being sustainable.  Few if any consumer based companies are sustainable.  True sustainability initiatives in organisations seldom go beyond the Practice Work Level III and most often are aimed at  direct action tasks.

However there is a growing awareness of this and we can all do our part in encouraging real sustainability and calling it when we see resilience masquerading in its place.