In 1999, Steve published Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations (preview on Google Books). Most of Steve’s content is now on his website at http://www.senseandrespond.com/ .
One of the major ideas coming from Steve has a distinction between setting a direction, and outlining the boundaries of (acceptable) behaviour for members of the organization. Here’s an excerpt from the book that clarifies that.
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The Leader’s Role: Providing Context and Coordination
The word context, popularly taken to mean information providing an explanatory background, has a much more specific meaning in the sense-and-respond model.
Organizational context encompasses three basic parts: the organization’s reason for being, its governing principles, and its high-level business design.
Unlike typical mission and vision statements, which propose a (sometimes inconsistent) mix of goals and principles, a reason for being statement unequivocally defines the organization’s primary purpose—the one outcome that justifies its existence. It also identifies the primary beneficiary of that purpose and any absolute constraints on how it is to be achieved.
Governing principles set forth the organization’s unbreachable limits of action, including what its members must always do or never do in their pursuit of the firm’s purpose.
A high-level business design is a system design of the organization’s essential structure. It illustrates the relationships among elements both inside and outside the organization in terms of the outcomes they owe one another—the outcomes essential to achieving the enterprise reason for being.
Together, these three components of context tell accountable, empowered people where the organization is headed, the boundaries on their actions, and a picture of how what they do relates to what others do and to organizational purpose. A well-articulated context provides an unambiguous framework for individual activity, aligning and bounding organizational actions without dictating what those actions should be. It leaves empowered individuals free to choose the best responses to unanticipated requests within a unifying framework of unambiguous purpose, principles, and structure. [p. 17, editorial paragraphing added]
Developing and adapting organizational context is the primary responsibility of leadership. This creative process differs considerably from the problem-solving activities that many senior managers still consider their principal work. It calls for dramatically different skills. The rigorous intellectual exercise of context building depends on leadership’s ability to develop viable conceptual business
models—an ability rarer than talent for putting out fires. [pp. 17-18] […]
Leaders’ responsibilities do not end with creating context. They must go on to ensure that organizational behavior accords with it. This requires tracking the important commitments negotiated among accountable, empowered people. Defining organizational roles in terms of commitments made to deliver particular outcomes to particular internal or external customers puts appropriate emphasis on the interaction of system elements, not on their actions. It also emphasizes the system-defined outcomes required of these roles, that is, their contribution to organizational purpose, as opposed to the procedures required to produce that contribution. People in roles defined this way come to understand that they are not accountable for their actions but for the consequences of their actions. [p. 18]
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My first step after I had attended the course at the Advanced Business Institute was to arrange a two
day training session for my leadership team. We worked through the principles and began identifying
specific deliverables that we could start using in the workplace the next day. It was in that session that I
saw how I could utilize the concepts to make a real difference.
Reason for Being
We hammered out our first ‘Reason for Being’. I love that phrase! It has power behind it. Those three
words answer so many questions, much more than the more colloquial ‘Mission Statement.’ Working
with Steve, we got very precise about who our customers were and what we were supposed to be
providing them. This took several hours. I remember coming up with over 20 customers during the
initial discussions. Steve told us that simply wouldn’t do and was probably a contributing factor to the
problems we were experiencing. We finally worked the list down to one primary customer, and a short
list of other constituents who we had to satisfy in order stay in business.
Distinguishing who we existed to support from who we had to satisfy in order to exist was a critical lynch pin in our Adaptive Design. With clarity about this, we could now begin the journey of building a
customer- back design that would deliver the Reason for Being. That was very powerful, because we
finally understood who we were ultimately serving! Talk about laser focusing! This was a very simple
but very difficult exercise that crystallized the rationale for our unit’s existence.
Once the customer was understood, discussions ensued about exactly what we should provide that
customer. Again, Steve and his team were very helpful in getting that clearly understood in terms of a
primary outcome. “Outcome” is an important adaptive management term. My whole team had dealt
in nothing but deliverables. Outcomes are similar, but they focus on the benefits realized by the
customer, and are better defined. They have conditions of satisfaction; they have roles responsible for
delivering them and they are produced by a dynamic linking of outcomes that deliver the ultimate
outcome— the Reason for Being.
Again, wrapping our heads around the essence of why we existed, what we owed our customer, and
how the customer would benefit, allowed us to hold our team and our purpose in our heads and truly
understand it. Walking into those sessions, we did not have that understanding. Walking out, we did
and having it allowed us all to perform much more effectively.
“We will always…”, “We will never…” what a way to build a set of usable policy boundaries for a team,
large or small, within which to feel fully empowered to act.
This exercise is another element of building an adaptive organization. It involves coming up with a set of Governing Principles that the entire organization embraces and will live by. The attraction for me was the simplicity of the approach to develop them. The guidance we received from Steve and his team was to come up with a dozen or so principles that outlined the basic rules that people must follow while otherwise being fully empowered. Team members would accomplish their committed outcomes by leveraging their individual talents and skills while staying within the Governing Principle boundaries. We called it “bounded empowerment “which, together with the Role and Accountability Design described later, led to the realization of the BES Reason for Being.
The critical requirement for these principles is that they begin with “We will always” or “We will never”.
Ultimately, these became the most powerful words that I used to lead the organization. They laid out,
in simple precise terms, what the members of the organization could or could not do. They established
the boundaries within which people were empowered to act – without checking, and as rapidly as
possible. By establishing these principles, I was confident that I could coherently empower individuals to do what was necessary to deliver the outcomes they were responsible for. […]
Once I published the Reason for Being and the associated Governing Principles, I required every
manager to walk through these elements with their teams. The change in direction was literally
overnight. A problem in getting this to happen that had haunted the prior application development
leadership vanished. I recall being at a leadership meeting with my CIO where he made the statement
“it seems there is a great deal of interest in packaged solutions these days, what happened? That used
to be such a taboo with this team.”
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In knowledge-based professional organizations, there are lots of smart and motivated people. Instead of taking a “command-and-control” style, establishing a clear Reason-for-Being and Governing Principles unambiguously permits individuals autonomy in coordinating their work in empowered, self-organizing teams.
Haeckel, Stephan H. 1999. Adaptive Enterprise: Creating and Leading Sense-and-Respond Organizations . Boston, MA: Harvard Business School Press.