Book Review-Lean Change Management: Innovative Practices for Managing Organizational Change

Agile software development becomes lean development and lean startups, and sometimes the folks who grew up in software development transition into organizational change. They bring with them ideas from software development and information technology in general to attempt to make organizational change easier. That’s what Lean Change Management: Innovative Practices for Managing Organizational Change is. It’s a guide to organizational change management from someone who grew up in software development and agile approaches.

Satir Change Model

Jason Little views change from the lens of the Virginia Satir model, which is the model he was introduced to organizational change with. The model consists of a status quo (called the late status quo) interrupted by a foreign element, which is met with resistance and chaos, until a transforming idea allows for integration and a new status quo. The model grew from Satir’s work with helping individuals change.

Little recounts his introduction as being elected as the person who resisted the change and was eventually persuaded to move to the new status quo by some crafty people who were trying to make the new status quo a reality – and who knew that Jason was a fan of Johanna Rothman, who was teaching next door and kindly came over to help Jason change.

Starting the Change

Little is clear that the change process doesn’t start on some magical date that you’ve plugged into your project management software. Your attempts to manage the change start when people begin to mumble about the change and wonder what it means to them. If change is about managing the human aspects of change, then the idea that it becomes relevant when people begin to worry makes a great deal of sense.

The Mojito Method

Little explains that his approach to change management is based on Jurgen Appelo’s Mojito Method. The short of this method is that you mix ideas from multiple industries and disciplines into something that is uniquely your own but is based on sound working practices. The approach is what many would recommend for creativity and innovation. (See Creative Confidence, The Innovator’s DNA, and Design Thinking for more on mixing ideas.)

In Little’s case, he leans on his software development background.

Lean Change Cycle

Little explains the approach to organizational change management as an extension of agile and lean principles. Things like iterate fast, create minimum viable products, and learn are at the core of the approach. He uses an iterative process like Deming’s PDCA/PDSA cycle. However, in his cycle, it starts with insights, which create options, which lead to experiments that lead to more insights. The experiments themselves can be broken into preparing, introducing, and reviewing.

The general idea is to start the process and keep iterating, and therefore learning, until you reach the success that you desire.

Culture Hacking

Little introduces another technique brought to the agile community by Stefan Haas. The culture hacking process consists of three components: the crack, the hack, and hacking zone. They are as follows:

  • The Crack – The dysfunction of the organization that feels uncomfortable.
  • The Hack – The action that you take to amplify the discomfort of the crack.
  • The Hacking Zone – The degree of danger that your hack exposes you to as follows:
    • Green – Safe. These hacks aren’t a threat to you or anyone else.
    • Blue – Risky. These hacks aren’t likely to get you in serious trouble but might.
    • Red – Dangerous. These hacks will most certainly upset people. The question is whether they’ll fire you, label you a rogue, or accept the change.

I’ve learned through my study of learning that sometimes there’s a degree of desirable difficulty and the necessity to make it intentionally difficult to the learner – but that the difficulty must be in a very narrow band. Culture hacking seeks to make the appropriate level of discomfort overt. (See The Adult Learner and Efficiency in Learning for more on how to make learning more effective.)

Embracing Uncertainty

At the heart of Little’s recommendations lies one of the fundamental perspectives of agile. While traditional software development and organizational change believed that you can script every move, agile believes that the kinds of problems being worked are inherently too complex to be resolved by one group doing all the planning. Agile works from the premise that everyone is a part of finding the solution, because allowing everyone to solve their own problems may lead to sub-optimal solutions for the individual instance but ultimately will result in better overall outcomes.

Said differently, agile assumes that uncertainty can’t be removed, and therefore it’s more important to adapt to the uncertainty than to try to plan around it. The Soviet system of Leninist Marxism didn’t work, because central planning wasn’t efficient enough to compete with the energy produced by capitalism.

If you’re uncertain about whether you’re ready for a change, maybe you can approach your uncertainty with Lean Change Management.

Book Review-Conversations of Change: A Guide to Implementing Workplace Change

The greatest irony in a book with a title like Conversations of Change: A Guide to Implementing Workplace Change is to realize that there are few – if any – conversations of change really going on. Tucked in the back of this book is a list of the people that Dr. Jen Frahm believes are notable. They’re the leaders who are helping to move change forward. When I followed the URLs in the book, I found about 1/3 of their websites were gone completely. About 1/3 of the people on the list hadn’t posted a blog post in the last year or more. The remaining 1/3 of the sites had at least a moderate level of activity. So much for the conversation. This rate of failure is much higher than I’d expect for a book published less than 4 years ago.

Context

One of the great things about the book is that it helps to set the context for a change conversation. Despite many of the missing people, the key players, including ACMP and CMI, are explained as well as other players in the change management and organizational change management space. This baseline understanding can help people orient in the change management space.

Included in the orientation is some information about models and how methodologies and models aren’t a replacement for wisdom and experience. However, another one of the aspects that Dr. Frahm covers is the players in the change management process, which bears some investigation.

The Roles

I’m a fan of helping people orient to a space through the development of role charts. I created a role chart for software development and for training development. Here’s Frahm’s list for change (with my definitions/summaries):

  • Change Leader – The leaders (executives and directors) willing to publicly support the change.
  • Change Sponsor – The person ultimately accountable for the change.
  • Change Agent – The person who moves the change forward, often without direct, formal authority.
  • Change Champion – A person who extends the reach of the change team to encourage users and others to change.
  • Change Consultant – An external party brought in to support the change.
  • Change Manager – A manager whose people are impacted by the change.
  • Change Communications Advisor – A person who supports communications related to the project.
  • Change Analyst – A person who is responsible for managing the intersection of the change with different audiences and smoothing over any rough edges.
  • Change Enablers – People from supporting teams that help to facilitate or block the change. Commonly, these people are found in HR, Communications, IT, and Accounting.
  • Subject Matter Experts – The people who know their work best; what Taiichi Ohno would call “Gemba.”
  • Super Users – Highly skilled users who push the edges of the change.

Fakes and Failure Rates

One of the most challenging aspects about change is it’s difficult to tell who understands change and who doesn’t. It’s easy to say that you understand change management. It’s harder to prove that you understand how to manage the nuances of numerous sub-disciplines to navigate to safe waters. Here, Frahm quickly talks about certifications before moving on to a pet peeve.

There’s an often-quoted failure rate of 70% for change projects. John Kotter (see Leading Change and The Heart of Change) and Darryl Conner (see Managing at the Speed of Change and Leading at the Edge of Chaos) both use this failure rate as a part of their conversation about change. Frahm argues that the original number of 70% doesn’t have a basis in research. My response is, “duh!” Sorry, I learned a long time ago that if a percentage ends in a zero, there is practically zero chance that it was a research-based number. Research numbers rarely come out so cleanly.

The problem, in my estimation, isn’t whether the original 70% failure rate is research-based but rather whether it’s a reasonable estimate. We learned from Superforecasting and How to Measure Anything that you don’t always have to chase apparent accuracy when you can validate the number is roughly right through other means.

Frahm herself introduces IFOTOB – delivered “In Full, On Time, and On Budget” – as a project management metric. It’s a hard standard for projects, particularly heuristic projects, which invariably change projects are. Heuristic projects have no one definitive path forward, and the solutions are almost never completely understood at their outset. A quick search of research seems to indicate that 70% of all large-scale projects fail to hit all three of these targets. In short, while the number isn’t research-based, it’s reasonable if you’re willing to use a strict standard. It’s generous if you’re going to add “On Value” – meaning the project returned the value it was supposed to return.

Agile

Frahm stumbles into a conversation about agile software development. Having a software development background, I have a different perspective of agile software development. First, agile software development reduces ceremony. That is, instead of formal anything, it replaces it with understanding and co-creation.

Second, agile is about understanding humans and how we work best. We’re solving real problems for real people, and that matters. Finally, software development, like change, is a heuristic problem. There’s no one right way to do things, and there is instead only a path to be found by taking one step, reassessing, and then taking the next step.

RAS and the Resistance

Frahm speaks about our reticular activating system (RAS). It’s the master filter of our brains, and it’s the part of us that controls the difference between sleeping and waking. The RAS can become focused, and the things that are more salient suddenly are raised to conscious more. When you’ve recently purchased a new car, you’ll see that car on the road everywhere, because your RAS is tuned into that particular make and model. (See Got Your Attention? and Change or Die for more on the RAS.)

Frahm is concerned that by looking for resistance, you’ll train your RAS to look for more resistance and it’s all you’ll see. Here, the psychology gets murky, but I believe the thinking is off a bit for two reasons. As Daniel Kahneman explains in Thinking, Fast and Slow, we have a negative bias. In short, we’re going to look for resistance naturally because it’s a threat to our change. Second, the RAS isn’t a one-trick-pony. The RAS can – and does – monitor for anything that is anticipated to be salient. It’s important to look for resistance (see Why People Don’t Resist Change) but also to look for bright spots to get both the good and the bad. (See Switch for more on bright spots.)

Practically Speaking

One of the best things about the book is that it generally takes a very practical perspective on change, from making a point that change projects with fancy sounding names end up getting very negative nicknames to recognizing that not everyone influences through charisma. (See Nick Morgan’s book Trust Me for more on charisma and authenticity.)

If you want to get a solid framing for change management without academic mumbo-jumbo, it may all start with Conversations of Change.

Book Review-99 Ways to Influence Change

Many people that write about change write as if you’ve already got the support of executive leadership and that it’s just a matter of learning how to execute. It’s as if the whole buy-in problem has been solved already. Heather Stagl doesn’t write from that perspective. She writes from the perspective of the change agent who is stuck in the middle. They’re in a situation that they know should or needs to change, but they’re responsible for building support for the idea. That’s what 99 Ways to Influence Change is. It’s a handbook for those stuck in the middle of change for how to be more effective when they’re trying to get change done.

One Page

Rather than list the 99 ways of influencing change that Stagl presents in the book, I’ll point you to a one-page summary she has on her website. It provides the outline for the ideas that are presented in the book, which she shares came from some of the other books that I’ve already read and reviewed, including Leading Change, Nudge, Predictably Irrational, Switch, Influencer, and Influence.

The list is a good short summary of many key points and makes a great “one-a-day” sort of motivational book for trying to drive your change project forward. I’ve picked a few points from her list that I’d like to amplify.

Modeling Behavior

One of the hardest things to do as a leader (and a parent) sometimes is to model the behavior you want to see in others. If you want to encourage emotional intelligence in others, you must display it yourself. Stagl explains that you show folks the “right way,” or the way you want to see them do the behavior, which demonstrates commitment and encourages others to conform to the behavior. She was implying but not directly referring to Solomon Asch’s work on compliance, which was followed up by Stanley Milgram. (See Unthink for more on Asch and Mistakes Were Made (But Not by Me) for more on Milgram.)

Temporary Assignment: Change Agent

In Stagl’s view, the position of change agent should be temporary. Folks who are champions, agents, and friends of change should rotate periodically, so they don’t get burned out – and so the organization doesn’t start to reject them like a virus. Being a change agent is hard work, and you don’t want folks to have to take on the role forever. (If you’re feeling like you’re becoming burned out, you’ll find resources at Extinguish Burnout to help.)

Care Before Knowledge

People don’t care how much you know before they know how much you care. This is the core truth at the heart of Radical Candor. It’s also something that you’ll learn as a leader. No matter how remarkable you are or how much you know, it won’t matter until people believe that you care about them – more than you care about what you know.

Competition and Cooperation

Some of the suggestions that Stagl shares come with warnings and caveats. Imploring folks to compete is one of those suggestions that receives a warning. I firmly believe that some folks are wired to compete, and they want that sense of competition in many aspects of their lives. I also believe that this is generally unhealthy when focused internally in an organization. Richard Hackman in Collaborative Intelligence explains how the forces of competition inside a group are disruptive to the success of the group. As a result, I believe that competition should be reserved for outside the organization and collaboration used exclusively inside the organization.

I recognize that this may be an unpopular view, with some indicating that salespeople and others who are prone to competitive personalities may need this to be motivated. Here, I point them to Edward Deci’s work in Why We Do What We Do and how fragile intrinsic motivation is in the face of external motivators – like competition.

Transparency and Trust

It’s framed in the context of transparency in an item titled trust. It’s about how to improve the trust, because trust is a universal lubricant that makes things easier and better. (See Trust=>Vulnerability=>Intimacy, Revisited for more of my thoughts on this.) It’s important to realize that trust is sometimes – but not always – transparency. The more that you’re able to help everyone feel like you’re trustworthy in your actions, your capabilities, and your communication, the less friction you’ll see in your project.

Listening

Yogi Berra is said to have said, “You can learn a lot by listening.” The truth is that, though we all believe we’re good at communicating, we’re not all that good. (See Mindreading as a primer.) While our ability to understand what is going on inside others’ minds may have separated us from other animals, it’s not foolproof. (See The Righteous Mind for more.) The truth is that listening is about sense-making. This could be The Ethnographic Interview to try to understand another culture or Motivational Interviewing to try to deeply understand an addict’s point of view before gently moving them towards healthier behaviors.

100th Way

The title inspired me to wonder, “What would I add as the 100th way to influence change?” Certainly, there are other ideas and research-based perspectives for moving change forward, but I think the simplest answer might be to read 99 Ways to Influence Change.

Book Review-The Opposable Mind: How Successful Leaders Win Through Integrative Thinking

Conflict is a good thing. Conflict between our fingers and our thumb – our opposable thumb – created the ability to create tools and ascend to the most dominant lifeform on the planet. In The Opposable Mind: How Successful Leaders Win Through Integrative Thinking, we learn how it wasn’t just the mechanics of our members but the integrative nature of our intelligence that has really allowed us to remain king of the biological mountain on this planet.

Genius

F. Scott Fitzgerald said, “The test of first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.” Genius is in creating situations where we’re able to leverage the power of “and”. It’s not the finger or the thumb in isolation that allows us to pick up things and to create tools – it’s the use of both.

It was 15th century Florence, Italy, when the Medici family assembled some of the greatest minds in one place to work on their own projects. In the process, they managed to create a kind of cross-pollination between experts and disciplines that kicked off the Renaissance period. They created a safe environment where different disciplines could sharpen one another.

Today, it’s easier to assemble great thinkers virtually for an hour or a few hours. It’s easier to hop on a plane and arrive in the same destination for a deep conversation about how my perspective and yours aren’t the same. It is, however, simultaneously harder to find the right people.

Non-Linear and Co-Causal

Which came first, the chicken or the egg? The egg is the answer because of reptiles, but the real question is which one causes or creates the other. The challenge is to draw the causal arrow from one thing to another. However, integrative thinkers tend to think in terms of systems. (See Thinking in Systems for more about systems.) Instead of seeing a set of discrete, unconnected events, integrative thinkers see everything as connected and causing a network of reactions, some of which feed back and drive the very behavior that started things off while others inhibit the behavior. Instead of following the simple linear logic of A causes B, integrative thinkers think in terms of the influence that A has on B and the influence that B has on A and how they might reach a steady state – or might be completely unstable.

Some systems are dynamically stable. That is, the forces are designed in such a way that they dampen oscillations. Private aircraft are designed this way. It’s what makes it possible for a pilot to control them and for the changes to get smaller over time. Military aircraft are not dynamically stable, and micro-adjustments are made by the flight computer to compensate for the instability and execute the intent of the pilot rather than the commands of the pilot. The computer doesn’t wait for the pilot to respond to a slight pitch right or left if it wasn’t what the pilot was indicating on the controls; it quickly and automatically makes the control surface corrections to keep things in balance. The fact that the computer reacts faster than the instability operates allows it to keep things stable.

Dynamically unstable systems are more performant – thus why they’re used in military aircraft. However, the dynamic instability means that they are more susceptible to faults, failures, and “black swan” events. (See The Black Swan and Antifragile for more.) Integrative thinkers simulate what they see in their head. They automatically create models to look for how systems are going to react – rather than looking for the simple causal arrows. (See Seeing What Others Don’t and Sources of Power for more.)

Not Afraid of the Mess

Integrative thinkers aren’t afraid of the mess that the model causes. They’re not afraid to go in and tinker with things to see what the results are. Ultimately, integrative thinkers aren’t afraid of the mess that happens when you build models for everything and try to connect them, because they’re comfortable that, in the end, they’ll figure out how things fit together.

They accept that their initial models of the systems will be flawed. They accept that there will be forces they don’t see or understand. However, they’ll remain confident that, given enough time and experiments, they’ll be able to find their way to a model – and a map that works.

Map Is Not a Territory

One downfall of the integrative thinker is that they sometimes forget a map is not a territory – that is, their map and model, no matter how good they get, will always be fundamentally limited and remain imperfect. This can lead to poor decisions when you consider them against the actual system as compared to how their model was constructed.

One of the challenges with building a model is that it’s built on the back of our perceptions of reality, and those perceptions are themselves necessarily flawed. Our perceptions aren’t always what they appear to be. We believe we’re perceiving reality, but it’s closer to say that we’re making our reality up from our perceptions. (See Incognito for more.)

Integrative thinkers need to be on guard for where they may be ignoring conflicting signals that may indicate their model is imperfect.

Required: Deep Understanding and Empathy

To be an integrative thinker, it should be no surprise that there needs to be a deep understanding of the relationships between the various aspects of the system. Deep understanding is what the whole model-building process is about. However, there’s another aspect that transcends understanding and moves into the category of empathy.

Instead of just intellectually understanding what is happening, integrative thinkers develop an emotional connection to their models and the people who are stuck in the systems they’re modeling. They begin to be compassionate to those whom they see marching along in the system with no way out.

Refusing to Accept Tradeoffs

Integrative thinkers aren’t likely to accept tradeoffs. Instead of accepting the standard approach to balance A and B they look for ways to change things to get more of both A and B. Like the Nash Equilibrium they look for ways to create win-win situations where there is no obvious win-win. (See The Science of Trust for more on the Nash Equilibrium.) Their approach might be to reconfigure the pieces they have, remove pieces, or add in pieces that aren’t normally a part of the equation.

For instance, there’s always a tradeoff between the ease of storing information and the ease of retrieving information. However, creative thinkers look for ways to leverage technologies like full text search to make it easier to both store and retrieve information. Why make people enter an invoice number if it’s in the full text of the document and can be searched? Even more powerfully, why not use artificial intelligence to pick up the invoice number and place it into a metadata field for you? Thinking like this doesn’t seek to create balance in a zero-sum game, instead it looks to create a new, larger game.

Best Available, Right Now

Integrative thinkers have given up on the idea that they have the best answer. Instead, they just believe that they’ve got the best answer for right now. There is no delusion that they’ve got things figured out. Instead, they’re aware that the answers they have today are the best answers they have for now. Instead of maximizing and getting to the absolute best, they’ve settled – they’ve satisficed – for the solution that is good enough. (See The Paradox of Choice for more on maximizers and satisficers.)

In the end, the best answer you can get to right now about how to approach problems differently to find better solutions may be to read The Opposable Mind.

Book Review-Capital in the Twenty-First Century

I never gave much thought to economics or the economy. They always seemed like bigger issues that I couldn’t impact or influence. There’s no point in understanding something over which you have no influence – at least that’s how my reasoning went. However, I saw a reference to Capital in the Twenty-First Century while attending a meeting about a new technology designed to improve knowledge management. The connection intrigued me. With my work on knowledge management and education, perhaps I could affect inequalities after all.

Societal Context

When I started reading Capital, there was not as much unrest as there is today. Today, the very needed and more visible Black Lives Matter movement reverberates through the United States. The movement is distorted by those who would use it for political gain or those who feel it’s an opportunity to express their violence in socially acceptable ways.

I’ve quietly initiated private conversations with some of my black friends to better understand the problems and look for the ways that I can help reduce the inequalities. I mean this from primarily the perspective of respect and acceptance of others and secondarily (but importantly) from an economic standpoint.

The reason this is relevant to the review of Capital is because it opened my eyes to the capacity to transform inequities. I was already aware of the reasons for the Sesame Street program, including the desire to level the educational playing field through “G” is for Growing. By minimizing the education gap and through teaching emotional regulation skills that were often not available to economically-disadvantaged children, the playing field could be leveled a bit. (See Emotional Intelligence for more on emotional regulation and The Years That Matter Most for how the instability of being poor impacts children.)

There were two core realizations from my conversations with my friends. The first mechanism used to repress black Americans was to disadvantage them economically. The second mechanism was to (over) criminalize their coping behaviors through drugs. (I won’t further cover this here, but I’d encourage those interested to look at Dreamland and particularly Chasing the Scream.) It is my hope is that some of the insights from Capital can ease the struggle for equality.

Communism

For some, Marx had it right. If we all lived equally, then all our problems would be gone. However, the Soviet experience proved that even communism has its limitations and faults. Largely we’ve escaped the arguments about whether a democratic, capitalist, free-market system is a better approach or communism. However, both sides admit that neither system is perfect. A more open discussion of the benefits of each can help to avoid situations like the Cuban missile crisis – and One Minute to Midnight.

Capital explains that Marx totally neglected the impacts of technological progress and steadily increasing productivity in his analysis and that these forces can – to some extent – serve as a counterweight to the steady accumulation of capital. This counterweight, when used with other counterweights such as excessive taxation on the highest incomes, can help keep the inequalities of the free-market system in relative check.

The final point to Capital is that democracy and capitalism must be reinvented again and again. The same can be said for every form of government and societal regulation system. If Capital revealed anything, it revealed that even when the overall things remain the same, the structure can and does change.

Inequality

In the United States, there’s a general disdain for those whose fortunes are conveyed by inheritance. We look down our noses on those who didn’t gain their lifestyle through their hard work. Historically, it’s been difficult for someone to elevate themselves socially or financially. In fact, it’s not been until the 21st century that people anywhere had a shot at making their own fortunes. However, in the United States in the last 50 years it has become – or at least it was – possible to make your own fortune and elevate your status within your lifetime. Throughout the history of the human race, such a feat has largely not been possible.

Still, one must be in the 99.5% percentile of income before more income comes from capital than one’s labor. The idea that there are many people who live solely off their inherited fortunes is largely an illusion. For the most part, those who have money make at least half of it themselves.

These numbers may be slightly skewed in ways that Thomas Piketty may not have expected. As Paul Tough notes in The Years That Matter Most, those who go to the most prestigious colleges appear to earn more than their peers. The point here is that some of the income that Piketty is accounting for as labor or mixed income may be attributable to the ability to attend these colleges. Piketty does acknowledge that there is a conspicuous change in gifts to endowments during the period when a parent has children of college going age.

Published well before the spotlight, this is the legal side of the 2019 college admissions bribery scandal. If there is no quid pro quo for the contributions to the endowment, then nothing is wrong. However, only the naivest would believe that there isn’t some impact to the admissions of children of large donors.

The fundamental problem with income inequality is that forms a potentially large positive feedback loop that continues until a powerful external force comes and addresses it. (See Thinking in Systems for more on feedback loops.) The size of the reinforcing impact is shaped by the savings rate, the inflation rate, the rate of taxation, and the rate of growth in the economy. When you combine a modest savings rate (20%), an average return rate of 8% (the historic average), and an inflation rate at about 2% (the historic average), after about 29 years, you’re earning more income than you need. At that point, unless your consumption rate changes, you’ll continue to develop more capital than you consume. While 29 years seems like a very long time, it’s not such a long time when considered in generational terms.

The Structure of Income

Of primary concern to Capital is the creation of capital and its effects. The ratio between capital and income is expressed repeatedly as a framework for understanding the impacts of capital on the economy. The interesting observation is that, though the nature and structure of capital has changed over the long term, capital is generally six times the income of a country. There are variations over time and from country to country, but the results generally return to these values.

Also, over the long term, the ratio between capital and income can be defined by the savings rate (how much is being saved) and the rate of growth in the economy. It’s important to note that this doesn’t take immediate effect – this works over decades.

These truths lead to some interesting observations. Given the average return rate of 8% and a 6:1 ratio between capital and labor, we find that roughly two thirds of the income comes from labor and roughly one third comes from interest on capital.

There are nuances to the analysis that escape the quick eye but for which Piketty has provided careful explanation. For instance, nations hold capital in the form of land and buildings. This capital is different than the kind of capital that private individuals and institutions hold. Similarly, not all income from labor is the same.

Risk and Entrepreneurship

Richard Cantillon coined the term entrepreneur to literally mean “bearer of risk.” (See Originals for more.) When we’re looking at the return on capital – that’s put at risk – and the labor of the entrepreneur themselves to transform that capital into something more, the line between labor and capital gets blurry. This is an area where Piketty creates a category which is mixed. That is, the income is accounted for partially by labor and partially by capital.

By assuming higher risks, entrepreneurs can get radically higher returns. Of course, many of these attempts won’t work, as we see with many startups and the business failure rate statistics. (40% of businesses fail within three years.) However, the allure of greater returns, often described as ten times, is what draws entrepreneurs to take the risks.

One of the reinforcing characteristics of return on capital is that the greater the size of the capital, the greater the possible return. This is in part due to the marginal cost of hiring experts to help generate higher returns is smaller and in part is due to the ability to take greater risks due to a greater safety net of a larger base of capital. The ability to earn larger returns on larger sums of capital is an accelerator to the reinforcing loop.

The Shift to Labor

One of the interesting observations is that the top centile (1%) of society moved from passively living on their wealth in the form of rent to actively working to increase their wealth. Instead of simply accepting that rent will continue to flow, we’re now combining our capital resources with our labor to amplify the results of both.

Perhaps this is a natural consequence of our post-World War II transitions to where work and study could allow one to transform their economic situation so dramatically. If you work your way up to the top of the income hierarchy, it may be hard to give up the habit of working. Conversely, if you’ve been comfortable resting on your laurels at the top and you see new upstarts challenging your relative financial dominance, you may be motivated to action. In either case, we’re working harder to make our money work for us.

Inflation

I was introduced to the power of inflation to radically transform an economy through The History of Iceland. Iceland has used inflation to virtually eliminate debt on a few occasions. Piketty explains that inflation is one of the rather blunt tools that central banks have on redistributing wealth inside of a nation – and decreasing the impact of national debt. The problem with inflation it seems is that for all the powers to reduce impact of national debt, it seems to be most harmful to those who have the least wealth.

The most intriguing thing to me was that inflation is a relatively new phenomenon, having only appeared in the 20th century. Prior to that, inflation was effectively nil. This to some extent makes sense. The growth of productivity was similarly very small. As our productivity increases get larger, the variations in the economic systems invariably get larger as well, and inflation is one of the controls.

Diffusion of Knowledge

One of the great forces that counterbalances the concentration of capital is the diffusion of knowledge. This is something of great interest as we enter an age where it’s increasingly easy to access information and accumulate knowledge. Some of the ways that knowledge gets spread aren’t obvious.

One challenge in developed countries is that the average rate of return on capital is stagnating and therefore is less than the rate of return that can be earned in other parts of the world. However, to recognize these returns, it’s necessary to share knowledge with the other parts of the world to make them more productive. We see this in the form of the increased benefits of free trade, where studies indicate that the diffusion of knowledge is the primary factor leading to productivity gains. We also see it as organizations spread their operations throughout the world, thereby spreading their knowledge.

Availability of Knowledge

Sitting where I do, with decades of experience in both internet technologies and knowledge management in particular, I’m excited about the impact of the underlying technologies and the increased awareness that we have about how knowledge is shared, how adults learn, and how to help people be productive. I know that we have a greater capacity to learn and teach than we have ever had in history.

For all the serious consequences of COVID-19, it has given us all an increased awareness of our ability to learn remotely. From the kindergarten classroom to the college degree, we’re now in an era where instruction is delivered on demand to your doorstep. The change has been coming for a few decades now, but COVID-19 crystalized its place. Simple challenges like finding the books that you wanted were radically transformed by Amazon.com. Kindle brought the ability to deliver a book to someone in moments.

Jonathan Haidt makes the point in The Righteous Mind that we’ve become the dominant species on the planet through our ability to work together. A simple glance is turned into shared intentionality. Our internet-fueled world removes the need to be geographically close to be able to develop that shared intentionality – and the shared knowledge.

The Eighth Wonder

It’s often reported that Einstein thought that compound interest was the 8th Wonder of the World or, alternatively, the most powerful force in the universe. The rules of compound interest would be that, ultimately, those who started with more – or got a better return – would eventually have immeasurably more than most. It is a powerful engine to separate people and create inequality. However, often it doesn’t seem that way.

When the growth or compounding occurs at a tiny rate, it takes a long time before the differences start to show up. During most of our time on the planet, the growth rate of our output has been barely 1% – but over time, even this trivial amount adds up. As was reported in The Halo Effect, in absolute terms, Kmart made great advances in its core metrics. However, its competitor, Wal-Mart was making even more dramatic increases in its inventory turns and ultimately drove its profitability up a few percentage points. This allowed for greater investments and optimizations, which further drove their performance increases. Wal-Mart is a retail powerhouse and Kmart has never really emerged from its bankruptcy filings and virtual irrelevance.

The diffusion of knowledge and expertise works as a counterbalance to the forces that would allow organizations to continue to improve unconstrained. In The Rise of Superman, Steven Kotler explains how moderate improvements over a long period of time have the capacity to make human feats seem superhuman. However, as the knowledge of the superhuman feats is diffused to everyone, they lose their luster, their uniqueness, and they become the new performance level that everyone expects. Roger Banister cracked the four-minute mile after 9 years of people attempting to break the previous record. He held the record for two months before someone bested his record. Once everyone knew that it was possible to run the mile in four minutes, it seemed like everyone was doing it.

In fact, in a decade, high school runners were running the mile in less than 4 minutes. Evolution doesn’t work that fast. The runners weren’t better because they had better or different genes. They were able to run that fast because we learned how to better coach runners to achieve those speeds.

Perception of Inheritance

Historically inheritance was a measure of your position in society. The more you inherited the better your class. However, the upstarts in the United States developed a particular aversion to large inheritances. The perception was that real people worked for their money – and to some degree this perception remains. Citizens of the United States are sold on their image of hard work, and they’re likely to snub their nose at “old money.”

There’s not a good or bad to it. Our perceptions have simply shifted – just like they’ve shifted with regard to the role of taxation.

The Role of Taxation

Despite the nearly universal distain for taxes, we all accept that we must pay them. We can no longer dump tea in Boston Harbor. We must develop and leverage a tax system that allows us to finance the operations of the government – and serves to constrain capitalism’s imbalances. The truth of capital taxes is that they rarely have a substantial impact on the overall finances of a country. Capital taxes are more useful in their ability to constrain capitalism and to establish socially acceptable norms – like not having large inheritance.

Ultimately, Piketty sees the role of capital tax as necessary but insufficient tool to constrain capitalism and the natural expansion of Capital. Take a read yourself and decide how Capital works for you.

Book Review-On Becoming a Leader

Sometimes my reading list has me walking down a long hall with statues lining each side. The statues are the great men and women who moved forward our understanding of ourselves, the way that we work, and the way that we lead. On Becoming a Leader is Warren Bennis’ capstone. Though he had an autobiography written after this work, this was the last book focused on the process of becoming a leader.

Many people who were the foundation of leadership have passed. Edward Deming may be remembered more for management than leadership but he was a leader in his own right. Chris Argyris brought us the idea of the ladder of inference (see Choice Theory for more). James MacGregor Burns shared his perspectives on political leadership through his book, Leadership. Robert Greenleaf led us to his perspectives on Servant Leadership. Jeff Barnes reminded us of Walt Disney’s leadership in The Wisdom of Walt. There are, of course, many others whose contributions have helped leadership move forward but who didn’t always focus on leadership.

The Crucible

Leadership isn’t something that you’re born with. It’s not like eye color or height. It’s something that everyone must work on to develop and cultivate. The way that leadership is cultivated is through the crucible of hard times. There’s no path to leadership that doesn’t run through a path of sorrow. There are plenty of books that are published each year that promise you’ll become a leader if you only follow their five-step plan or if you only envision it first.

Bennis’ wisdom says this isn’t true: there are no shortcuts, and those who say otherwise are like the fad diets that promise great results with no work. Certainly, there are accelerators that allow for leaders to be developed faster; otherwise what would be the point of leadership development? However, there is no path that will not require some work on the part of the future leader.

Leadership Development

While most organizations extol their virtuous development of leaders, few do the work. Surveys indicate that, while most organizations say they do leadership development, only about 10% of organizations had any formal leadership development practices. The gap between those who know they need it and those who prioritize its execution is large. The development of leaders is lost in a world where we seem to change jobs more frequently and there’s a constant pressure for immediate, short-term results.

Leadership development is a long-term game. It requires extraordinary patience and diligence on the part of the organization to ensure that everyone is given the tools they need to maximize the value of all the difficult situations they must go through.

Adaptive Range

There’s been a shift happening in our society, which was captured in Range. The shift is from the deep-deep specialist to someone who can integrate across the boundaries of professions and who can adapt to the changes that our increasingly volatile, uncertain, complex, and ambiguous world requires. Bennis knew this, and that is why he explained it’s a leader’s adaptive capacity that makes them the most valuable.

Always a Character

Many will share Bennis’ belief that leadership is about character. However, not everyone will draw the conclusion that the kind of character needed for leadership is the same kind of character necessary to become a fully integrated human being. Some, like Brené Brown when she talks about a wholehearted person (see Daring Greatly), share this belief.

Bennis makes the point that when you look at great leaders, you rarely find people who have had no struggles. Mostly when you find great leaders, you find that they had some sort of difficult phase or event in their life, and they found their way to the other side. What they developed during these struggles was the character that fuels their greatness. In Antifragile, Taleb explains how the right level of challenge or struggle at the right time can allow people to grow and become more, much like how you get stronger muscles by tearing them down just a bit through exercise.

Great leaders learn how to create this same kind of challenge for those they lead. They find ways to push them in ways that allows them to grow. The process is very long, but it pays great rewards.

In the Long Term

Short-term thinking is a “societal disease.” Those were the words that Bennis used to describe what has become the plague of our century. As a species, our ability to work together allowed us to conquer the planet. (See The Righteous Mind for more.) Our ability to support some people working on long-term endeavors has led us to the Moon – and to a gradual shift in the amount of effort required for our basic needs. Diffusion of Innovations recounts the improvement in farm productivity – and the drop in the number of farmers that were needed to support our food needs. We build roads and machines to make the work of people in the future easier. Well, at least we used to. It seems like today we’re more focused on the quarterly returns than the returns to humanity.

While there is a need for enough short-term focus to keep things going, too much focus on short-term needs leaves us with the same struggle year after year. When some effort can be invested in long-term needs, compounding kicks in, and we’re able to make our load lighter – and, ultimately, our overall lives easier.

If You Can Understand It, It’s Yours

“Nothing is truly yours until you understand it – not even yourself.” From the Socratic dialogues and the inscription of the oracle at Delphi, the instruction has been clear: know thyself. However, too many people aren’t in touch with who they are. We wander through life wondering what our purpose is. We aren’t sure what we believe in or what we stand for. We don’t understand why we get angry or sad. Instead, we bumble our way through the darkness of our thoughts and emotions hoping to find the door that leads to happiness. (See Stumbling on Happiness if you’re looking for more about how we look haphazardly for happiness.)

Perhaps one of the reasons why we don’t think in the long term is that life seems like a collection of random events over which we have no control or influence. In those situations, why would someone try to think of the long term? If we can’t learn enough about ourselves to predict our behaviors, then what good would it do?

Mistakes Aren’t Failures

Because leaders are so varied in their approaches and skills, it’s often hard to draw a dividing line between someone who is and someone who is not a leader. However, one key marker is the way they treat a mistake. Leaders accept – but don’t like – mistakes and work to prevent them or mitigate their impacts. Non-leaders see a mistake as a failure.

Some people have internalized the idea that you must be perfect. For some, that undoubtedly came from a performance-based love in their childhood. (See The Four Loves.) For others, the cause may not be so clear, but the results are the same. By expecting that everyone and everything must be perfect, the results must be disappointing. (See The Paradox of Choice for more.)

Chance Favors the Prepared

Louis Pasteur said that “chance favors the prepared.” More commonly, we say that luck favors the prepared. The truth is that luck is random, and it comes to everyone. Those who are prepared are more able to take advantage of the lucky break when it comes. Leaders are constantly preparing for the lucky break – while not expecting it or expecting that everything will be perfect.

At some level, the preparation that must be done is the constant balance between preparing for the future – paying attention to the long term – and tending to the moment, the everyday, and the present. Because luck is, by its nature, random, you’ll never know which investments you should be making as a leader. You only thing you know for sure is that you want to continue to make long-term investments in ways that prepare you for what will be your eventual turn at luck.

On Becoming a Leader reverberates through other works and provides a simple and straightforward context that we can use to develop our own method for becoming a leader.

Conflict: The Value of Time

When in the middle of a conflict, it’s too easy to get swept up in the rising tide of emotions and believe that the conflict must be resolved immediately. Our brains are evolutionarily wired to focus on the biggest threat, and a conflict is a threat. While it may not be a physical threat to us, the threat to our ego that we might be wrong is still very real. Our body’s response to a threat is a cocktail of chemicals that can make it hard to think.

Physiological Impact

If you perceive danger, in an instant, your body is going to release a set of hormones into your bloodstream to prepare it to respond – immediately. This so-called “fight or flight” response has been known for ages and the lead chemical in this cocktail is adrenaline. It’s a part of a set of signals to shut down the long-term processes – and thinking – and make all energy reserves available for addressing the current threat. (If you want to know more about the physiology of the threat or stress response, see Why Zebras Don’t Get Ulcers.)

Our immune system shuts down, as does our digestive system, but that’s not the most disturbing and challenging aspect. What happens is we narrow our focus and stop looking for alternatives and solutions. (For more, see the book Drive.) In short, our body’s own approach to the stress of an eminent threat to survival creates challenges when the threats we’re facing are more psychic than physical.

While there are many chemicals released when we’re facing danger, adrenaline is the key actor in our inability to consider alternatives, and it has a half-life of about 20 minutes. That means creating space and time in a conflict may be just what the doctor ordered.

The Science of Relationships

John Gottman is famous for his ability to predict with 93% accuracy the ability for a couple to stay together after just three minutes. It’s three minutes of fighting, but with that, he can tell signs of whether they’ll make it or not. (See The Science of Trust for more.) One of his recommendations for improving the odds is to slow things down and more rationally consider the situation. This advice helps in part because of the decay of the adrenaline but also because it allows you to focus on what’s important.

One important point about the additional time and space to be created during or after a conflict is to not rehearse the conflict in your mind. Our brains are incapable of determining whether the threat is real and now or whether it’s something old and imaginary. This is why, while watching an action film or a horror movie, our pulse can jump sky high – our brains can’t make the distinction between where we are and what’s on the screen.

Let It Breathe

The advice, should we find ourselves feeling physically or ideologically threatened is to wait for the chemicals to dissipate. However, the advice is equally good when facing conflicts that seem less immediate and for which the reasoning is complex. Sometimes, a conflict isn’t really a conflict at all. It’s an artifact that the other person hasn’t had a chance to think about all the information provided to them to come around to our way of thinking.

As a result, sometimes the best thing to do to get a new idea supported is to allow the powers that be an opportunity to consider the proposal and decide that our approach is better than the old existing ways of doing things.

Either way, slowing a conflict down is good advice for any stage of disagreement.

Book Review-Change Better: Survive – and Thrive – During Change at Work and Throughout Life

A surprising amount has been written about change. It’s been written from an organizational context, a personal context, and a societal context. The underlying connection is that all change is personal change. To get our organizations and societies to change, we must change personally as well. This lies at the heart of Jeanenne LaMarsh’s book, Change Better: Survive – and Thrive – During Change at Work and Throughout Life.

Life is Change

The book was written in 2010 – a decade ago. However, the language could be appropriate today even without LaMarsh understanding the scope of her statements. “No matter who you are, the skill to deal with constant change needs to become a permanent part of your life.” The change velocity then was more than it had ever been in the history of human civilization, and it’s even faster now. Instead of measuring change in generations, we measure change in decades, years, months – and even minutes.

Each of us craves stability and certainty. It makes our prediction-engine brains comfortable to know that they can do their jobs. However, we never had certainty. There were changing weather patterns before we could predict the weather. There were floods and fires that would wipe out entire towns. Despite the knowledge that certainty is an illusion, we cling on to it.

To thrive today, we’ve got to let go of the quaint belief that we can know everything or plan for everything, and instead we must build a capacity within ourselves to accept – and even welcome – change. We need to learn how to surf the waves of change instead of being crushed by their relentless nature.

The Transition Delta

What William Bridges calls the neutral zone (see Managing Transitions), LaMarsh calls the delta zone. The Greek letter delta is used to signify change. It’s a place of confusion where every decision that might have previously been automatic must be reevaluated and considered in the context of the new world that we live in. Daniel Kahneman in Thinking, Fast and Slow provided a model for cognition that includes two systems. Most of the time, he explains, we walk around using “System 1,” which is automatic. Switching into “System 2” requires more energy and therefore is a less desirable state. However, in conscious change, we must constantly reengage “System 2” and therefore consume more energy even if the energy is consumed through thinking rather than action.

Thinking Is Not Doing

While it’s true that thinking about something doesn’t make it so, it’s equally true that thinking can be work. In the United States, we have a bias against thinking being “real” work. We can look at the biology and neurology that indicate we’re consuming energy, but somehow, to the protestant work ethic, thinking doesn’t feel like getting anything done.

Of course, we can take Benjamin Franklin’s admonishment, “If you fail to plan, you are planning fail,” as an indication that we must do some planning work to be successful, but that doesn’t make it “feel” more like work. Athletes are taught to visualize their success to enhance their performance. We know that all but the motor neurons fire when someone is visualizing their performance – so they’re rehearsing it. Even patients with amputated arms are taught to visualize to allow them to help them cope with the loss of their limb. (See Descartes’ Error.)

We must fight our bias towards action and moderate our action with our capacity to plan. If we can’t do planning in conjunction with our action, we’re destined to fail.

All Change is Personal

Change Better is squarely focused on the personal level of change. Not that it’s about changing yourself personally but rather it’s about connecting what you need to change personally to help the organization’s change be successful. It’s filled with worksheets of questions that are designed to improve your ability to see the reasons for the need to change, the exact nature of what the change will look like for you personally, and the path to reach this new place.

These worksheets are available from the LaMarsh web site at https://insights.lamarsh.com/personal-change-management-workbook. I’d encourage you to check them out to learn how to Change Better.

Book Review-Change the Culture, Change the Game: The Breakthrough Strategy for Energizing Your Organization and Creating Accountability for Results

Most books on change conveniently dodge the challenge of culture. After all, changing an organizational culture is difficult. It’s easier to deliver a tactical project than it is to change the way that people think. However, Roger Connors and Tom Smith rightfully think that until you change the beliefs embedded into the culture, you’ll never achieve the breakthrough results you really want. In Change the Culture, Change the Game: The Breakthrough Strategy for Energizing Your Organization and Creating Accountability for Results, they lay out a process for getting different results based on the foundation of accountability and beliefs.

Working Backwards: Results, Actions, Beliefs, Experiences

In the end, everyone is pursuing a change, because they want a different set of results than what they’re getting today – or they predict they’ll get in the future. The point of the exercise is the tip of Connors and Smith’s pyramid. However, to get to different results, you need different actions. It’s the actions that lead to the results – but what leads to the actions?

Our beliefs lead to our actions. Certainly, there are mitigating factors like skills and motivations, but fundamentally, we will act out our beliefs if we’re not influenced by anything else. Similarly, if our beliefs aren’t right, then they’ll pull our actions back. We can “fake it” with our actions for a time, but ultimately, we’ll revert to our core beliefs. That leaves the question about how we develop our beliefs.

Our beliefs are based on our experiences. Our beliefs must make sense of our experiences. We’ll keep shifting our beliefs until we can make our experiences fit – or we’re able to ignore incongruent experiences. Actually, we’ll believe what we want – until we can’t. That is, we’ll believe what we want until the weight of the experiences we have can no longer be denied. (See How We Know What Isn’t So for more.)

Shortcut to the Top: Behaviors Only

In today’s VUCA (volatile, uncertain, complex, and ambiguous) world, we often look for the shortcut, the quick answer, and the easy results. That’s what happens when organizations decide to skip over experiences and beliefs and jump solely to actions while hoping to get results. While this strategy may work in the short term, over time, the pressure to perform actions in congruence with beliefs becomes stronger.

It’s like diets. They work for a while, but for the most part, they fail in the long term, because they’re working on the surface problem instead of the core beliefs. Reports are everywhere about people gaining more weight than they lose, with only a few who manage to keep weight off for more than 3 years. Eventually, the core beliefs that make up the person’s eating habits erode the logical control of their actions. (See The Happiness Hypothesis for a model for how our beliefs – or emotions – can override our conscious control.)

Building Beliefs

Most people are curious about how others hold beliefs that differ from theirs. The answer is simple. They have different beliefs because they have different experiences. They grew up in different cultures, neighborhoods, and families. These environments impart a set of experiences on people, and those experiences add up to the beliefs that they hold.

If you want to change the beliefs of the people in the organization, the path is paved with experiences that clearly indicate to everyone what the beliefs you want them to hold are. There are four levels to experiences:

  • Level 1 – These send a clear and unmistakable message about what beliefs you want people to hold.
  • Level 2 – These experiences need to be interpreted for people to understand their meaning and the beliefs that you want them to hold.
  • Level 3 – These experiences won’t influence beliefs no matter how much explaining that you do.
  • Level 4 – These experiences detract from the beliefs that you want people to hold, and as much as possible, they should be avoided.

Culture and Alignment are a Process

Creating a culture is hard enough, but it’s even harder to maintain that culture when the organization grows and changes. It’s hard to build the experience into the lore of the culture – a permanent and unmistakable message about what the organization believes. When Johnson and Johnson pulled all the Tylenol off the shelves of every store in the United States as the result of a few tampered packages in Chicago, they sent a clear and unmistakable message that the safety and health of their customers was more important than profits. This incident ended up becoming a part of corporate lore – and more broadly to the world around the organization in this case.

In most cases, it’s hard to find or create the kind of type 1 experiences that naturally embed themselves in the lore of the organization. However, it is often possible to convert type 1 and type 2 experiences into persistent stories that can help to maintain the culture of the organization – if they’re reinforced.

Maintaining a corporate culture requires continuous work on the alignment of the organization around focusing challenges and opportunities that are compatible with the corporate culture. This requires continuous work, as both the environment around the organization and the internal skills and challenges shift.

Neither culture nor alignment is a “one and done” type of project. Instead, it’s necessary to continue to work at them long after the process has started and reached a level of success.

Focused Feedback

Kim Scott in her book Radical Candor explains how feedback should be clear and complete. Cy Wakeman makes a similar point about being direct in No Ego. Connors and Smith agree that feedback should be candid, clear, and complete. More importantly, they share a concern that people tend to dismiss negative feedback.

Before dismissing feedback, they recommend asking four questions:

  1. Is it accurate?
  2. Is there a basis for this feedback?
  3. Is it relevant or irrelevant?
  4. Is it right or wrong?

Some feedback will be baseless. Some will have a foundation but won’t rise to the measure of being relevant. Overall, you’ll have to decide whether the feedback warrants your attention – but give it the benefit of the doubt when you can. At the very least, you can validate the feedback with others and see whether it’s something that you’ll need to address or not.

Two Pyramids

In the end, there’s a pyramid that begins with the current experiences, the current beliefs, the current actions, and current results. There’s another pyramid with the new results you want that are based on new actions, new beliefs, and new experiences. If you want to really change the culture of your organization, perhaps it starts with one behavior: reading Change the Culture, Change the Game.

Book Review-Leading at the Edge of Chaos: How to Create the Nimble Organization

My first highlight from this book is “Stability is no longer the prevalent condition of our age.” That’s a simple and profound truth as we must find ways to cope with the constant change we’re in while simultaneously leading our organizations and families. That’s what Leading at the Edge of Chaos: How to Create the Nimble Organization is all about. It’s about leading our organizations through change. In it, Darryl Connor (who also wrote Managing at the Speed of Change) puts forth the proposal that organizations today need nimbleness, resilience, human due diligence, and execution.

Change – For Better or Worse

In today’s world, we’re faced with change whether we like it or not. While there’s a long list of folks who say there’s a 70% failure rate with change efforts, there’s still relatively little attention paid to the biggest blocker of change: people. What is more concerning is that few people are minding the hen house as changes continue to fail and therefore represent unnecessary expense and turmoil for the organization. Even those changes that are “successful” fail to produce the intended value, therefore failing to return on their investment to the organization.

The return on change – like return on investment – is a factor of both the cost to implement the change and the benefits that are received. Not all the costs are hard dollar costs. Some of the costs are the mental energy that the process sucks up from employees, vendors, and customers. These costs are often substantial even for change projects that aren’t funded with much money.

Consider that there is transition and uncertainty in any change, which necessarily causes a reduction in production. This trough of productivity can encourage burnout (see Extinguish Burnout). It can deprive the organization of the sales and therefore cash it needs to survive.

The return on the change may similarly be non-monetary. Some changes will result in a more pleasant work environment, more future stability, or less operational friction. All these are great outcomes that don’t show up on the bottom line.

The Dynamics of Change

We perceive solid objects as, well, solid. The trick is that they’re still mostly empty space. It’s just that the atoms and molecules form a pattern that doesn’t adjust very easily. The atoms themselves are a dense center with spinning electrons circling them. This creates the illusion of space consumption and, in some cases, solids. Much of what we see as constant is really a set of overlapping and joining oscillations that are, for the moment, in one state; but in the next moment, they may change altogether.

Even in the coldest of our winter nights, we still are bustling with energy. We see water change from liquid to solid and believe that nothing is happening; yet, down to -273.15 degrees Celsius, there is still energy vibrating the atoms. We must learn to not only anticipate change but to accept that we’re standing on constant changes.

Predictability Lost

The great challenge to all this is that, as humans, we are prediction engines. (See Mindreading for more.) We try to predict the future to reduce the potential for future harm. We believe that our predictions allow us to control or shape the future. (See Compelled to Control for more on our need to control.) To acknowledge that what we think is real is just an illusion created in our brain is disconcerting for most of us. (See The Hidden Brain and Incognito for more.) It means that our ability to predict the future is very, very limited. Philip Tetlock and Dan Gardner explore the limits of prediction in Superforecasting, but their predictions operate at the level of organizations – and the struggle of lost predictability is personal. It’s our ability to maintain our belief that we’re safe.

Change In and Across Systems

The changes that we find in organizations occur at a micro level within a person or a team but ripple across the entirety of the organization. Some of the changes that we try to accomplish reside inside a single individual. It’s a change to reduce destructive behaviors or enhance productive ones. However, those changes impact the dynamics of the others in the family. Often with people afflicted by addiction, their recovery disrupts the network of relationships they have, including friends and their families. Their former friends lose a drinking buddy. The family regains a parent or child but often to the disruption of the routines that were already established.

The changes we make may be focused locally but will ripple outward to other systems. Conversely, the changes that we desire to make across systems all come down the need for individuals to change their behavior.

Limits to Operation

Every system has limits to its operation. (For a primer on systems, see Thinking in Systems.) I remember my high school chemistry class. I loved it. I loved the idea that you could mix things together and get other things. I also vividly remember that reactions didn’t work outside of a PH range. If you wanted the reaction to occur, you had to be in the range – and if you wanted to prevent it, all you had to do was drive the solution out of the range. While the specifics are related to chemistry, the general case applies to every category of systems – human, organizational, societal, etc. They only work in a range. When the environment changes the system may or may not work.

Organizations, by their nature, develop a set of systems. Michael Gerber encourages the creation of systems in his classic book, The E-Myth. These systems will continue to work right up to the point where they fail. Nassim Taleb warns of spectacular failures in The Black Swan. In the end, change masters are ones who can see the systems that are going to break because of changes – before they completely break.

Pushing the Limits

The opposite end of the spectrum are those situations that push people and organizations to grow. Taleb’s follow on book to The Black Swan, Antifragile, explains how systems can be designed to push the limits and grow from the process. It’s not that pushing people to the edge of – and occasionally beyond – their comfort is easy or for the faint of heart. However, ultimately, it’s this process of constantly extending capabilities that allows individuals and organizations to become more resilient and survive over the long term.

In The Rise of Superman, Steven Kotler explains how the seemingly superhuman feats of athletes are simply the progression of their abilities over time. If you work at the limit of your capability and grow consistently, you’re bound to end up doing things that most people don’t believe are possible if you are simply given enough time.

Success

Success – in the market and in life – is then simply a matter of guesswork, pushing the limits, and waiting for the long odds to eventually come in. You can’t expect that you’re going to hit a home run. They’ll happen occasionally, but they’re difficult to do consistently. Instead of hitting home runs, working to consistently get on base ultimately gets you the most runs. It’s about working towards your goals in the long term and accepting that everything you do today is a guess as to what will lead you to those goals in an increasingly uncertain world.

So, on the one hand, you can’t predict the future, and on the other hand, you must work towards the future even if you don’t know exactly what it will be.

Large and Tiny

There’s a tricky bit to solving the problems that come from the environment. We tend to believe that the scope of the solution must be commensurate with the size of the problem. However, that’s not the case. As Dan and Chip Heath point out in Switch, the size of the problem and the size of the solution need not be related. It’s possible to solve very expensive problems with simple solutions.

Often, the simple solutions are better, because they don’t require the kind of build up and support that complex solutions do. Consider for a moment the need to turn over a can. It’s simple to build a machine that grabs the can and flips it over. It could even move it from one place to another. However, if you want to flip every can at scale, you can simply induce a half-turn spiral into the process. It will rotate the orientation of the cans 180 degrees both reliably and quickly. The problem of flipping over all the cans can be solved in a complex way or in a simple elegant way. Often in change we skip over the simple and elegant on our way to the complex and difficult.

Leaders: Live Your Own Life

Sometimes, the problem with change isn’t a change problem at all. It’s a problem where a leader feels like they didn’t get to do something, and as a result, they’re reliving the experience through their organization. In my review of The Available Parent, I shared the story of a man whose daughter had to play soccer, because he missed out on a soccer scholarship. These kinds of misses occur at work too. A manager who didn’t get a chance to play with some new technology may chose to invest in new technologies when the right response is proven methods of success.

Nimbleness

It’s sometimes called agility, and it’s about adapting to change. When organization become too bureaucratic and rigid, they invariably become misaligned with the world. As a result, they soon wither and die. When change was infrequent, these eventual deaths were often looked upon with the reverence of an old friend who had retired. In today’s constant change and turmoil, these losses start to resemble people who left before their prime – or even before they could be fully known.

Being nimble is about increasing the organization’s capacity for change such that it’s possible to capitalize on more benefits for more change with less future shock and frustration.

Resilience

Of Conner’s concepts, this is the one which I have the greatest struggle with – not because I disagree that resilience is important, because I know it is. Nor is it because I don’t think that he relates good points. I struggle, because I believe his coverage misses the key aspects of resilience. Rick Hanson’s book, Resilient, does a much better job overall – which is to be expected, since he dedicated the book to that premise.

Where Conner is focused on seeing people as being more optimistic or having a realistic belief that they can succeed, I believe that learning self-efficacy and trusting those who care for us has more to do with resilience than focusing on opportunities. (See Trust=>Vulnerability=>Intimacy, Revisited for more.)

Human Due Diligence

What Conner now calls “human due diligence,” he called “assimilation points” in Managing at the Speed of Change. The point that people can only cope with so much change is accurate – but providing it with a trademarked name seems a bit over the top to me.

Execution

While not much is said about execution other than the expected statements about grit and determination, execution is a key part of any change. (See Grit, The Four Disciplines of Execution, and Willpower if you’re interested in learning more about execution.) For your execution, perhaps it starts with reading Leading at the Edge of Chaos.