21st Century Leadership: Building Human Systems in the Age of Complexity

picture of an automotive assembly line

Industrial Age Assembly Line


I think the next century will be the century of complexity. – Stephen Hawking January 2000

 

I recently had the chance to take the public tour of the Ford Motor Company’s Rouge River F150 plant. I watched as each painted body entered the plant. I watched as the doors, hood, tailgate, etc… were disassembled and as the remaining body wound through a myriad of ‘stations’, each an independent and ordered assembly point where individual components, like windshields, are installed (the robots are pretty cool to watch…).

Each station had its own tools and parts ready close by.

After a predictable and repeatable length of time, this maze produces an assembled body ready for transmission and engine exiting at a point very close to original entry.

A complicated, orderly, linear system; yes.

A complex, interactive, and interdependent system; no.

 

It caused me to consider how many of our organizations today are structured similarly.  We organize along functional and independent silos (think HR, Finance, IT…).

Our ‘teams’ are simple groupings of aligned resources on an org chart who complete their own work items at their individual ‘assembly station’.

These items wind through the linear set of assembly stations to form some product or service that exits the organization on its way to customers and markets (as previously touched upon here, here, and here).

 

However, the “Century of Complexity”, as Stephen Hawking has titled it, has created an environment of free and frictionless information, rapid disruption, and a more compressed, globalized world (as previously touched upon here) and these assembly line approaches, based on a stable, certain, simple, and ordered world, no longer work.

Organizations that continue to utilize these outdated approaches will be unable to meet the rapid, undefined, and often viral, contextual influences that surround them. They will remain limited to the mediocrity of sound bites, slogans, and slide decks and the odds are stacked against them.

Management in these environments must change. It will now require a focus on human systems vs. human machines.

 

Where human machines are lean, efficient, and predictable; human systems are complex, responsive, and adaptive.

In industrial age hierarchies of fear and compliance most people are too busy watching their back, maintaining appearance and pretense, to accomplish anything meaningful. They are unable to take the risks associated with creating healthy interactions and relationships of trust that are the building blocks of human systems.

In human systems directives, rules, and punishments no longer guarantee optimal performance and successful outcomes.

 

“Top-down authority structures turn employees into bootlickers, breed pointless struggles for political advantage, and discourage dissent.” – Gary Hamel

 

In this new reality management will be required to grow and lead deeper, richer, interlocking systems of systems. Each deliberately sensing, interpreting, and adapting.

Critical thinking and creative problem-solving become more important than sub-optimized lean and efficient. Risk-taking and trial-and-error trump compliance and conformity.

 

So what is a system?

A system:

  • has a purpose
  • is composed of many parts where each part interacts and is interdependent on others and can affect the whole system
  • can’t accomplish its purpose based on a singular part’s accomplishments
  • cannot be understood as a collection of parts
  • can only be understood by its purpose, interactions, and interdepencies

 

Human systems are complex adaptive social systems and consist of three overlapping layers: (1) individuals, (2) interactions, and (3) values and norms.

They must feature certain conditions like safety, trust, commitment, and a quality the McChrystal Group labels ‘shared consciousness’.

 

“Trust is the foundation of real teamwork.” – Patrick Lencioni

 

Individual members in the system must be able to move up the human ‘fear to hope continuum’ and from lower to higher levels in Christopher Avery’s Responsibility Process, from Blame, Justify, and Shame to Responsibility.

According to Jurgen Appelo they must: feel competent, feel accepted, have curiosity, satisfy their honor (sense of belonging), have idealism (purpose), have independence (autonomy), have some order, have power (influence around them), where social contracts emerge, and have some organizational status.

And they must have the right emotional and mental models, motivations, and commitment to contribute to the system as a whole.

 

The system itself must:

  • have an understood and collectively committed purpose
  • have leadership, authority, and influence (formal and informal)
  • have values, standards, and norms, where members “pull in the harness together” (as my friend Mike Czach says)
  • have a degree of shared identity, including heritage, symbols, and stories
  • respect individuals and be socially and emotionally capable
  • celebrate successes, no matter how small
  • be capable of healthy conflict
  • engage in reflection and continuous improvement
  • not settle for the mediocrity of the lowest common denominator

Like many contextually rich facets of the human condition, building and leading these human systems is simultaneously straight forward, as well as incredibly difficult.

 

“A bad system will beat a good person every time.” – W. Edwards Deming

 

Getting started is simple and shining successes are beginning to flourish.

Consider the likes of Spotify (aligning around products through tribes, squads, chapters, and guilds), Zappos (adopting the organizational structure of Holacracy), HCL (structured as an inverted pyramid where management works for the front lines), and to a certain extent, even Ford Motor Company, whose recently successful transformation is best captured in the book American Icon:

Before Alan Mulally arrived in Dearborn, Ford meetings were arenas of mortal combat … As a result, little was accomplished beyond self-preservation … To make sure they got the message, Mulally tied each executive’s performance to the success of the company as a whole and forced everyone to “Join the Team”. Mulally and his team pulled off one of the greatest comebacks in business history. As the rest of Detroit collapsed, Ford went from the brink of bankruptcy to being the most profitable automaker in the world.

Mulally understood the importance of building human systems in complex environments and times of crisis.

 

“Whether you think you can, or you think you can’t – you’re right.” – Henry Ford

 

On a side note we can leverage the principles of agility in order to be more intentional, focused, and disciplined about building and sustaining human systems.

How do you grow and nurture human systems?

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