Paper: whole ecosystem change

“When the best leader’s work is done, the people say ‘We did it ourselves’.” 

Lao Tzu    

To succeed in an age of continuous disruption, organisations need to balance exploration and execution. They need to create agile cultures of innovation by fostering continuous experimentation and transformation across organisational boundaries. And they need to achieve this without losing sight of disciplined execution against the current strategy. This requires leaders to embrace a paradoxical model of what an organisation is, how change happens and the role of leadership in making this happen. We call this approach Ambidextrous Leadership and it involves balancing two distinct approaches to managing organisational change – Directional Leadership and Connected Intelligence. 

From the time of Henry Ford through the remainder of the Industrial Age, the traditional “Directional” model of leadership has prevailed. This model is rooted in the idea of the organisation as a machine. The future is seen to be predictable and controllable, so change is planned and controlled from the top. Because challenges are considered to be principally rational, leadership focus is almost exclusively on strategy, structure, process and tasks. The whole is viewed as equal to the sum of its parts, so execution is managed via a reductionist approach, inevitably creating silos between functions and levels. Whilst this way of working is suitable for less complex change, the transformational challenges presented by an age of disruption cannot be solved solely by using a Directional Leadership approach. 

Why is this? In a volatile market, incumbents and challengers alike face complex, adaptive challenges.  These transformation challenges require a whole system response – since they require a reconfiguration of how functions, levels and subgroups relate and work together along the value chain, to adapt to the changing market dynamics. Because of this, disruptive challenges display three unique forms of complexity: 

1. Systemic complexity: where you sit in the system determines your view of reality 

Disruptive challenges defy linear analysis and prediction and have no one right answer. Furthermore, adaptive challenges show up differently in different parts of the organisation.  As a result, reality ends up depending upon where you sit in the system.  Each group has only a partial grip on the definition of the problem, as well as its answer. Over time confirmation bias means that groups become increasingly convinced that the perspective afforded by their position in the system is the right one. Viewpoints become embedded, leading to polarisation and fragmentation, when what is actually needed is creative synthesis across differing perspectives.  

2. Relational complexity: trust and relationship issues emerge at pressure points  

Disruptive change involves relational as well as rational dimensions, since a reconfiguration of how functions, levels and groups need to relate and work together along the value chain is required. When structure and processes fall out of alignment with a changing marketplace, collaboration issues and power struggles emerge at the critical interfaces between functions, levels and departments.  If they are not addressed properly, connection suffers and trust disappears. Relationships become locked in a negative cycle of diminishing openness, feedback and communication – turf wars and siloes emerge and, as a result, trust disappears.  

3. Creative complexity: the future is unpredictable, unfamiliar & undetermined 

In a complex and volatile environment, transformation is a creative task. When the future is uncertain and being rewritten on a daily basis, it is not possible to plan rigidly for the long-term, or fragment transformation activity into isolated silos. To navigate disruptive change organisations need to develop collective agility – and this requires the capacity for continuous whole system experimentation, learning and adaptation. 

At Living Systems we have developed a unique approach for leading complex transformation, which we call Connected Intelligence. This doesn’t replace traditional Directional Leadership, but sits alongside it as an alternative approach for addressing complex, organisational change.  Whereas Directional Leadership focuses solely on topdown direction, alignment and control, Connected Leadership adopts a whole system approach to managing change – making it more appropriate for tackling complex problems, as shown in the table below:  

 Directional  LeadershipConnected 
Intelligence
Systemic complexity Where you sit in the system determines your view of reality Top-down, siloed 
approach to change
Whole ecosystem transformation
Social complexity Trust and relationship issues emerge at critical pressure points Rational 
problem solving
Rational and relational problem solving
Creative complexity The future is unpredictable, unfamiliar & undetermined Experts, best practice
&  long-term planning
Whole system experimentation, learning & adaptation

1. Addressing systemic complexity 

As a starting point, Connected Intelligence acknowledges that the leaders at the top don’t have all the answers. It therefore focuses on whole ecosystem dialogue and transformation. This involves bringing together a microcosm of the ecosystem that is impacted by a disruptive challenge, to work collectively on solving it. This approach recognises that our perception of reality depends upon where we sit in the system. Many of the critical issues impacting the success or failure of a transformation programme lie in the working relationships between functions, levels and departments.  Bringing together people from across the value chain who are actually experiencing a problem increases cognitive diversity and adds to solution quality. By surfacing and investigating the differences in perspectives between groups, we are able to develop “full system sight”- broadening and transforming the group’s understanding of the problem. In this way, Connected Intelligence fosters creative synthesis, creating the potential for genuine breakthrough solutions, rather than quick fixes, or half-hearted compromises.  

2. Tackling social complexity 

Secondly, Connected Intelligence focuses on rebuilding connection and collaboration across silos and boundaries. It recognises that the critical issues preventing organisations from adapting to disruptive change lie as much in relational issues, such as addressing breakdowns in collaboration between functions and levels, as they do in solving rational problems. For example, very often in our transformation work, we are called in by senior leadership to “fix” middle management or frontline workers, who just “don’t get the strategy”.  Yet when we go to speak to people further down the organisation, they are pointing their fingers back up the business – telling us that the business would succeed if we could just change the behaviour of senior leadership, or change a function other than themselves. If we were to draw a picture of the situation, we would realise that everyone is standing pointing the finger at someone else.  

Disruptive change entails a reconfiguration of how functions, levels and groups relate and work together along the value chain – and these relational issues are often the core symptoms that need to be surfaced and addressed for transformation to occur. Each group holds their own narratives about the situation and projections around their relationships with other groups. If the organisation is to have any chance of success in addressing its disruptive challenge, these projections and stories have to be undone – not just within the leadership team, but often between functions and groups several levels below in the organisation.  

3. Dealing with creative complexity 

Finally, Connected Intelligence recognises that complex, adaptive challenges defy prediction and long-term planning, and aims instead to establish agile processes by which the whole ecosystem can collectively implement, learn and adapt on an ongoing basis. So what does this look like in practice? During the first whole ecosystem event, the group selforganises into an initial series of teams to work on identified opportunities both during and after the event. The whole ecosystem then reconvenes at repeated intervals to collectively review learning and refine team activity accordingly. This process ensures learning from, and between, diverse functions and levels is incorporated in real-time into transformation planning, developing the capacity for collective agility.  

The leadership team has a significant role to play – whilst they are not required to come up with the solution itself, they provide the guardrails for discussion and steer transformation activity between whole ecosystem events. A further benefit of this approach is that the potential is created for genuine shared ownership of the transformation programme by the whole ecosystem. Whilst this approach does require extra time up front, it more than makes up for it over time since it fosters genuine buy-in and alignment across boundaries. This means less time is needed in the long-run to ‘sell’ plans internally, and less resistance is encountered. 

Summary 

A disruptive environment presents tough challenges that can only be addressed by developing the capacity for Connected Intelligence. In a fast-moving world, top-down, mechanistic approaches to change become increasingly ineffective for dealing with complex transformation. Instead, leaders need to adapt their approach – mobilising whole ecosystems, addressing rational as well as relational issues and developing the collective agility of the organisation. Within this approach, the leadership team has a significant role to play in steering transformation planning between events and ensuring transformational activity is integrated within formal business processes. By providing greater visibility and devolving at least some level of ownership to the ecosystem as a whole, however, the potential is created for shared ownership of the transformation programme. Whilst this approach does take extra time up front, it more than makes up for it over time, since it fosters genuine buy-in and alignment across boundaries – meaning less time is needed in the long-run to ‘sell’ plans internally, and less resistance is encountered 

Finally, it also needs to be stated here that simply adopting the approaches outlined above is not enough on its own. Connected Intelligence places significant demands on both group and individual capabilities, which we will discuss this in further articles. It is only by taking an approach which integrates organisational, group and individual development that leaders are able to truly develop the capacity for Connected Intelligence – and thereby reimagine their organisations as adaptive, human networks fit for the 21st century. 

Want to find out more? Start the conversation to move your business forward by contacting us today.

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