Smart organisations grow – but smarter ones grow smarter. Many organisations expand over time, but few sustain a significant growth trajectory. In fact, to get the desired results, it can become more important for organisations to know what not to do than what to. And sometimes, even hitting the key performance indicators doesn’t help achieve medium and long-term goals; which is quite weird, isn’t it?
Whatever the nature of the organisation is, when it functions within a small boundary, the operation of the business is somehow naïve and even an average leader can sustain the growth. But, as the need for growth is intrinsic in business, leaders must constantly move to generate more profit or push their services to more people. It’s the norm – yet many organisations fail to do that. But why?
While organisations do consider these things, what they do not do is engage the mid and lower-mid level staff in the discussion. Therefore, these staff often do not or cannot see how their actions help the organisation attain its goals. They simply cannot see themselves in the strategy or where they fit into the strategy. Even with a clearly designed strategic plan, organisations fail to achieve the objectives because leaders fail to communicate and convince their team members of how they and their actions contribute to achieving those objectives.
It is completely different and difficult story when organisations don’t have a strategic plan, or a clear purpose for existing. While executives know what they do for the organisation and the major functions of their organisations, when I ask ‘why does your organisation exist’; many see the main purpose of the business is creating profit. But when I ask them how much profit the organisation aims to make, the answer is ‘I don’t know’. When I ask this question to not-for-profit organisations, leaders say they want to see a world free from poverty, deprivation, injustice, violence and so on. But they still fail to define themselves or their actions more specifically within the whole system.
People tend to forget the common ground we all share, and the need for everyone, and every organisation to contribute i.e. create value for society in some way. Objectives set in a strategic plan is the value proposition an organisation offers to society. So, if your objectives fail to create value, your organisation is likely to collapse because it is without foundation, and in the longer term, individuals and teams will be unable to fully commit to an organisation without purpose beyond profit.
But of course, organisations with a genuine value proposition creating or supporting societal wellbeing are not guaranteed success. If they fail to stand out, they will be lost in the crowd. Creating that competitive advantage has become harder and harder.
It’s also undeniable that organisations that can’t or won’t adapt to external changes, don’t survive. If you have a well-designed strategy, and follow that properly, you should be fine, right? But it’s not that simple. When organisations grow, they enter into a more complex relationship with different stakeholders. The more an organisation grows, the more complex this network of relationships becomes. So, in this growth trajectory, a single action does not have a linear impact on the whole system – rather it creates a myriad of unintended and often unforeseen effects on a range of indicators and agents.
Now, if leaders are able to capture these unintended consequences in their strategic planning, appropriate interventions are likely to mitigate any negative consequences. But many organisations fail to predict at least some of the flow-ons from their strategic decisions and processes choices. Systems thinking can be used to help leaders map and mediate these unintended consequences while designing strategies; by predicting the impact of your actions in a systematic way where things are interrelated in a complex hub. If leaders can predict all or even most of the impacts of their actions, and take appropriate measures to minimise negative consequences, outcomes will be better.
While systems thinking has been used for many large corporations, it can be effective even for a small organisation, such as when you are preparing the strategic 5-year plan for your council. Assess whether your decision will create a reinforcing loop or a balancing loop. Avoid the quick-fix, as it likely creates a reinforcing loop, which means the problem may only be fixed temporarily. Smart leaders design and implement a strategy so that they can address these challenges in a strategic and sustainable way. But the smartest leaders look at things differently and try to gauge the unintended consequences of their work in advance and then craft their strategy accordingly.
M Mizanur Rahman is the International Programs and Policy Manager of LG Professionals Australia and a PhD Candidate at Australian National University.
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