Part 2: Understanding your environment
Diagnosis of your organisation's context and internal dynamics is key to understanding your influences and levers for change.
The second part of the book will describe tools that can be used to understand an organisation’s environment. Unfortunately and somewhat unhelpfully, this apparently straightforward term is actually ambiguous.
In a pure systems theory sense, an “organisation’s environment” would refer to everything outside of the organisation, such as clients, competitors, regulators, and more fixed elements including built and natural structures.
However, when we talk about an organisation’s environment as employees, we normally mean: What is it like to work as part of this organisation? In other words, how can we analyse and predict team dynamics, interpersonal decision-making, management power structures and so on.
So in many cases, what people are really seeking to understand is the organisational experience of sub-units (groups, teams, and individuals) operating within the domain of the organisation itself, and how those interactions and relationships can be better managed.
Clearly setting the focus on the targeted organisation or sub-organisation will thus be especially important in the effective use of these diagnostics. In many cases, the same exercise might need to be performed at multiple levels of “zoom” to get an accurate picture of dynamics.
For example, a large consumer goods company might have rich customers who exercise significant power and influence over each quarter’s financial results. However, this is highly unlikely to be the most important day-to-day driver of decision making for the people who pack items for delivery in the warehouse.
Part 2 will include descriptions and implementation guides for four tools:
5. Landscape assessment tool
All systems can be classified according to five core characteristics, leading to a two-dimensional “landscape score” for both the organisation and its domain. Rated 0-10, the results diagnose whether each possesses designed characteristics (D, low scores), natural characteristics (N, high scores), or a mix of both.
The positioning of an organisation within this landscape allows for evaluation of the viability of various management strategies, with archetypes including:
DD — Highly responsive to most command-and control strategies, but risks collapse in effectiveness if uncontrolled complexity is introduced
DN — Use of tools such as squads and documented, rigorous doctrine to support adaptive responses in a highly dynamic environment
ND — Light-touch controls encouraging emergent behaviour in a strictly controlled domain leads to novel outcomes but with localised impact
NN — High team discretion on specific activities, bound only by basic agreement on organisational participation rules and goals. Minimal ability to direct outcomes but strong evolutionary and adaptive potential
Tools such as the Cynefin framework, which broadly characterise particular situations as Simple, Complicated, Complex, and Chaotic, are complementary to the characterisation of the organisation itself.
Certain landscape positions will be far more likely to face particular situations (for example, a DD organisation will commonly face Simple situations), but a situation does not guarantee an organisational response, nor does an organisation limit or dictate the range of situations it may potentially face based on its characteristics.
It is instead better to simply note that some organisational types will be better suited to implementing certain strategies of responses to situations, such as those discussed at some length in the Field Guide for Decision Makers inspired by Cynefin.
6. Stakeholder typology
It is common to talk of “internal stakeholders” and “external stakeholders”. But for the purposes of organisational dynamics, they affect and influence organisations in very different ways:
An internal stakeholder is a direct participant with motives and access to the organisation’s internal decision-making structures to influence behaviour
An external stakeholder has no access to the organisation’s decision-making structures and must wield or be delegated power in order to have influence
Mitchell and Freeman’s work on stakeholder identification and salience classifies stakeholders in three dimensions:
Power: The ability for a stakeholder to get an organisation to do something that it otherwise would not have done
Legitimacy: The degree to which the actions of a stakeholder are perceived or assumed to be desirable, proper, or appropriate
Urgency: The degree to which a stakeholder’s claims command immediate attention by the organisation
A stakeholder’s influence is then classified by their salience, where:
Latent stakeholders (low salience) are only recognised as possessing one of these dimensions
Expectant stakeholders (medium salience) possess two of these attributes, and
Definitive stakeholders (high salience) possess all three.
In practice, many expectant stakeholders are positioned to become definitive stakeholders, especially those already possessing power and legitimacy, should they wish to acquire the missing dimension.
7. Rule of hand
Power law (or Pareto law) relationships have been demonstrated as frequently occurring in natural systems, and the relative influence of key domain factors for a particular system will also normally follow a power law pattern.
The work of Brian Walker on resilience examines ‘social-ecological’ systems, an umbrella term referring to any environment involving a mix of designed organisations and natural environments, where there is an attempt to influence system behaviours towards observably beneficial outcomes and/or explicitly stated goals.
Using power law principles, Walker’s “rule of hand” posits that documenting and monitoring just 3-5 key indicators can be sufficient to understand 80% or more of system impacts, providing a useful heuristic for reducing complexity to a manageable level and guiding efforts.
8. QUO: Quantifying uncertainty in operations
Gabriele Bammer’s influential Integration and Implementation Sciences (i2S) framework proposes three foundational areas of competence for effectively intervening in diverse and complex social systems: synthesising diverse knowledge, understanding and managing diverse unknowns, and multidisciplinary research support.
In particular, Bammer and her collaborator Michael Smithson’s exploration of uncertainty is a valuable starting point for how organisations manage and respond to the unknown. All uncertainty can be viewed as a key constraint on effective action, but distinguishing the sources of uncertainty can refine the subjective experience and offer perspectives on the best strategies to address it.
Smithson explains that when we sense uncertainty:
We like more rules and order to be applied
We want (hope that) someone is pulling the strings
We more often blame people for failure and praise them for success
Drawing inspiration from the multiple Greek terms for love, the QUO diagnostic suggests five distinct forms of uncertainty:
agnos — the disruption to purposive action caused by a gap in knowledge
tikos — the irreducible impact of pure randomness in events
pollos — the friction and lack of consensus from conflicting perspectives
mikos — the inability to control the future arising from powerlessness
bombos — the inability to sense, either from too much or too little input