By John Camillus, author of “Wicked Strategies: How Companies Conquer Complexity and Confound Competitors“
Complexity and uncertainty are the two fundamental challenges that stand between entrepreneurs and the economic viability of their organizations. In today’s business environment, complexity and uncertainty stare us in the face and provoke paralysis in decision-making.
Traditionally, business owners and managers alike have dealt with complexity by trying to break problems down into smaller problems. But there are degrees and variations of complexity that are not readily amenable to deconstruction. Instead, in the face of what I call these “wicked problems,” managers and leaders must pursue “Wicked Strategies” – and as I will explain momentarily, this demands a new approach to hiring, training, and performance assessment.
While Wicked Strategies have a number of crucial components, one of the keys is a “feed-forward” approach to planning. Feed-forward planning processes work from the future backward, as opposed to the classical, feedback approach, which seeks to draw lessons from the past.
Another critical key to implementing Wicked Strategies is the need for firms to define their identity. In a world that is constantly changing because of myriad forces, including globalization, innovation, and shared value, conventional ways of defining an organization are obsolete or have ephemeral meaning. The construct of identity is intended to capture and articulate what is core, enduring, and distinctive about the firm, and will illuminate and guide decision-making. I believe “values” are core, “aspirations” are enduring, and “competencies” are what make an organization distinctive. Together, values, aspirations and companies constitute an organization’s identity, just as it can be argued to constitute a person’s identity.
Both feed-forward and the enhanced emphasis on identity must play a role in how you handle your company’s people issues. Here are some things to keep in mind in order to enable the successful implementation of Wicked Strategies in your organization:
Recruitment practices have to ensure that the values of the personnel brought into your firm are aligned with its identity. A combination of recruiting the “best athlete” and of recruiting for specific capabilities to address identified weaknesses or lack of capability within the firm needs to be adopted. The HR system should be designed to grow employees’ capabilities, and so building on a “best athlete” base would be an advantage. At the same time, new competencies may be urgently demanded by new businesses that the firm is entering, which may mean recruiting personnel with specific knowledge and skills.
There has to be more than just a willingness on the part of employees to grow their capabilities. There must be a corresponding ongoing process in the firm to add to the knowledge and skills of employees, which supports new competencies that are required by the new businesses and new business models that the firm will constantly seek to develop. In companies such as Merrill Lynch Credit Corporation, which I studied in depth as part of a benchmarking exercise, managers valued the opportunity to develop new capabilities in anticipation of strategic initiatives and new businesses. The managers saw such development as increasing their worth and contribution to the company. Such a mindset and the flexibility that accompanies it need to be developed and supported. It is important because the dynamic modular structure that is the third component of the feed-forward framework requires that personnel be moved across units to transfer capabilities and develop a firm-wide perspective.
Performance appraisal in a feed-forward context would be used more to support the growth and development of the employees rather than to reward and punish. Personnel whose actions and decisions affirm that their values are aligned with the firm’s should be cherished and thoughtfully supported. Individuals whose performance falls short but whose values are aligned with those of the organization are supported and provided with development opportunities. By contrast, high performers whose values are not those of the corporation are candidates for outplacement, even if their performance is good. Values are at the core of the organization and behavior that is in conflict with espoused values should not be acceptable.
Only with this approach to people issues can an organization effectively implement the Wicked Strategies today’s wicked problems demand.
John C. Camillus is the author of “Wicked Strategies: How Companies Conquer Complexity and Confound Competitors“, and the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh. He has served as consultant on strategic management to over 100 organizations on four continents, including many Fortune 500 companies.