Aug 14, 2024
5 min
Complexity
Team Development
Decision Making
Leadership
Organisation
Table of Contents
Things that have never happened before happen all the time.
Everyone experiences surprises, in their personal as well as professional lives. We expect one thing and then another thing happens. In our companies we are constantly surprised by the sudden changes that happen in our environment, often leading to confusion, blame gaming and even more bureaucracy.
From smaller surprises like when an important deadline needs to be pushed because a colleague gets sick, or when our budget is cut causing us to change our goals, or when we thought Peter was responsible for finishing the presentation and Peter thought Louise would do it, who thought…
To big surprises like when a ship suddenly blocks an important logistical canal, causing global supply chain challenges for months, or when a pandemic forces all employees to suddenly work from home?
Past performance is no guarantee of future results
In a world where cause and effect are obvious and easy to identify it makes sense that we try to avoid mistakes from ever happening again. But in a complex environment just because something has happened in the past, that doesn’t mean it reflects what will happen in the future.
Anyone who has traded stocks is familiar with the famous disclaimer “Past performance is no guarantee of future results” meaning that you shouldn’t assume an investment will continue to do well in the future simply because it’s done well in the past. The same goes in business and within organizations.
Making Surprises Your Best Friend
So the question is not whether or not surprises will happen — but instead how we choose to react to them and how we can set up our teams and organisations to handle them when they do occur.
For simplification's sake, let’s explore two different routes leaders take when meeting surprises in their organization.
The route most travelled
What happens in most organizations and by most leaders is that when a surprise occurs, they implement strict rules, processes, or potential penalties to “control” that something like this never happens again! In other words — bureaucracy, governance and more layers.
This route is great when you’re operating in a known, simple, and linear environment, where the cause can easily be linked to effect — but when we’re dealing with people and organizations we’re operating in a complex and ever-changing environment.
So what more hierarchy and bureaucracy are actually doing is getting in the way of their employees, slowing us down, and making decisions harder to make
What to Learn From Surprises
In the book Psychology of Money, the author Morgan Housel recalls a dinner where the Nobel prize winner Daniel Kahneman said:
Whenever we are surprised by something, even if we admit that we made a mistake, we say, ‘Oh I’ll never make that mistake again.’ But, in fact, what you should learn when you make a mistake because you did not anticipate something is that the world is difficult to anticipate. That’s the correct lesson to learn from surprises: that the world is surprising. Not that we should use past surprises as a guide to future boundaries; that we should use past surprises as an admission that we have no idea what might happen next.”
So what do you then do, if you have no idea what might happen next? It’s time to explore the second route.
Instead of implementing company rules and guidelines, companies should use surprises to explore where in their system they need to grow their resilience and flexibility even more. To understand where you still have unhelpful bureaucracy and bottlenecks.
What great leaders and organizations do is create a system and culture that emphasizes and enhances flexibility and resilience. They acknowledge that surprises and mistakes will happen, and as a result, build teams and departments that are autonomous enough to change when something no longer makes sense.
So they focus on moving decision-making to where information is. They focus on creating more dynamic and adaptive budgeting. They ask their, employees, how to handle surprises when they arise, instead of taking uninformed top-down decisions.
I want to close this article with a quote to sum it all up by Stanford professor Scott Sagan:
“Things that have never happened before happen all the time.”
