Futocracy case study — part 3
Cobra Development
By Dr. Reg Butterfield
15 minutes read.
Welcome back to our “Cobra Development” case study. Today, we continue the induction process for June our new colleague in the team. If you are a new reader of our newsletters, we suggest that you go back and read parts one and two of this case study, which were published on 26 March and 2 April 2023.
Today we will be discussing how our case organisation “Cobra Development” approaches the thorny issue of change. Last week we suggested that organisational change is often seen by people as something that is disruptive or gets in the way of the work. It also has a bad reputation for never really being completed before the next big change comes along. Even worse, people are just fed up with it and carry on in their old ways of doing things.
The Futocracy approach to organisational design and management focuses on change becoming part of the daily business. It views change as being a continuous activity that is used to empower people and the organisation. This approach means that episodic change is seldom used in Futocratic organisations, whereas episodic change is the predominant approach used by most other organisations, resulting in the negative views expressed above.
Continuing June’s induction
Hi June, I hope that your meeting with the CEO went well! Fantastic, I am pleased to hear that. This afternoon, I want to pick up where we broke off yesterday, we started to discuss how we deal with change in Cobra Development. Before doing so, I will visit the history of the company again so that the reasons for how we work today make more sense to you; it seemed to help you last time I spoke about the past.
Episodic change
There are many reasons for having to make changes in any organisation. For example: some are because the law changes and we need to introduce something new or different to comply with the law; increasingly it is because new technology becomes available and it’s in our interests to introduce it in the business; and in our business, we have a lot of customer requests for changes to our standard products or for completely new approaches to how our services are provided. On top of all of these we also have requests from our colleagues for changes in the way we work or for new tools. Of course, this is the same for all organisations and we used to manage these in the same way as most other businesses.
The business change requests from external customers and the legal requirements were the most important and focused on by management, particularly if they were easy to implement. If the change was complicated, time consuming, or expensive, it became a major project and took time to commission and introduce the change. Whenever the employees heard about such projects, the rumours started and the problems around implementation were quickly around us. In many cases the projects either took far too long or never reached full completion, particularly the ones related to technology. In just about all cases of change, management took little or no account of the impact on the people or the overall company processes.
Even with these failures taken into account, there were other casualties of this episodic approach, the employee suggestions for changes and improvements. Management was so busy controlling the daily work that the requests were ignored or seen as something to do later, which seldom happened. After some time, the requests built up such pressure on management that they introduced another project to sort them out and implement some; another form of episodic change, much of which was too little too late. It got to the point that everybody lost confidence in the organisation’s ability to even implement minor changes.
We can understand episodic change as ‘infrequent, discontinuous and intentional’ change. Whereas continuous change is ‘’ongoing, evolving, and cumulative’.
When we were discussing how to implement a Futocratic approach to our business, Reg, Ross, and Silvia explained the power of taking charge of change. We agreed that change is a continual process in society and hence businesses, particularly with more informed customers, and the large numbers of technological opportunities that emerge almost daily. If this is the case, then let’s use change as an opportunity as opposed to thinking of it as a problem.
This made sense to most of us as we could see it being a major selling point for the company. If we got it right, we could do more with the same people without stressing them, be flexible, be timely, improve workloads, and increase revenues. So, this is how we got to where we are today.
How do we treat change as an everyday part of the business was our first question.
The great thing about Reg, Ross, and Silvia’s approach to building a Futocratic organisation is their concept of building blocks. Each building block has a specific purpose and is part of the holistic approach to developing a new form. In the case of dealing with change, the first stage was to understand that change is predominantly predictable and as such, controllable. Where change is not predictable, it becomes an opportunity when it arrives as opposed to being perceived as a problem.
We learnt how to predict many types of change well in advance because the information is out there if we look for it. This links to our earlier comments and newsletter (12 February 2023) about one of the roles of the Purpose Alignment Team (PaT), which is external network weaving and information gathering.
Let me give you an example. Legal changes are seldom introduced quickly or without some “warning signals”. On some occasions it can take years or at best, months to go through the legislative process and the press tend to pick this up very quickly. In most cases, organisations ignore such advance discussions (warnings) and leave change to the last minute with the excuse that until the law or regulation changes, nobody can say exactly what the impact or requirement will be. The organisation then has another episodic change as it prepares to implement whatever is required after it is announced. The process is then usually undertaken in haste with resources taken from other important work and is prone to mistakes and often failure.
Smart organisations prepare their options in advance or in some cases see it as an opportunity and develop a product or service that supports that legal change; they have the time to balance the resources to achieve this. Yes, foresight is never perfect, and some surprises may emerge even when well prepared. Yet, the emerging elements can be more easily handled if the foundations for change are in place. Equally, many of the emerging elements can also be predicted in advance, even if it is not known until the last minute which one(s) will win the day. This way of thinking and behaving moves the potential risks to opportunities at a ‘cost that is affordable’ for the company. It is in this role of identifying opportunities that the PaT can add value in their outward looking activities, where previously our directors heading up the individual functions were too busy inward looking and micro-managing.
Similarly, the operational and supply chain teams can also identify such opportunities as they are facing external customers and suppliers. The teams can learn from what the customers and suppliers are looking for now and/or in the future. It is a different form of ‘listening’ to what the customer is not saying explicitly and yet are telling us through complaining about their problems or discussing their dreams or future projects.
Effectuation instead of Causation.
As part of our development, we also learnt how using an effectuation approach can often be more powerful than the traditional, typically linear, causation approach to decision-making and change. What do we mean by effectuation and causation? Good question. Let me give you an example.
Think back to your student days and you want to create a special meal for your friends. If you use causation logic, then you decide on the recipe and ingredients for the meal and set out your plan to create a wonderful dinner. To do this you will also have to buy the ingredients and spend time locating them. If you get the recipe wrong, then the meal is often spoilt. However, if you are more inclined to use an effectuation logic, you look in the fridge and larder to see what you have. Based on what you have, you improvise and create your masterpiece. It doesn’t go wrong because you create and test it as you go along, not meet some predetermined taste or visual effect. The fringe benefit of the effectuation approach is that you do not have to find extra money or go shopping, and you can also use some ingredients that may otherwise go to waste. The same applies to organisations.
[In management jargon it means that “Causation” models focus on maximising the potential returns for a decision by selecting optimal strategies and finding the necessary means to achieve them. Whereas “Effectuation” predetermines how much loss is affordable and focuses on experimenting with as many strategies as possible with the given limited means available at the time.]
The effectuation approach provides organisations with the opportunity to achieve more or different things with their current people, which is increasingly important in a world where there is more work than people available to undertake that work. Equally, it also enables us and our colleagues to bring in their ideas and be a crucial part of the development of our products and service strategy and design. Not just do as their manager tells them, as is the case in most other organisations that use the causation approach.
As we can see from this discussion about causation and effectuation, each takes a different perspective in terms of “managing” and “perceiving” risk. This is very important when it comes to the subject of episodic and continuous change. Let me demonstrate this with a picture we have on drone (Figure 1) that shows us the likelihood of disruption and the risk involved to the “core” of an organisation and its “periphery”. That’s it, you will find it in the drone’s support resources under definitions and descriptions. I never stop being amazed at how easy it is to use drone.
Figure 1: Risk and disruption comparison between episodic and continual change
(Adapted from Pennington, 2003)
In an organisation such as ours (Futocratic design) this distinction is important to understand as it underlines the rationale for continuous change being the preferred approach when compared to episodic change. However, it is important for us to remember that sometimes episodic change may be necessary, such as a major new IT system being introduced across the whole business. In such cases this picture also serves as a warning or reminder of the possible high risk and high disturbance disruption that needs to be considered during the planning and execution of episodic change.
We were shown studies that indicate that where peripheral activities have a history of being successful with continuous improvements, the impact of incremental or continuous change is unexceptional and can be accommodated as a matter of course. Whereas episodic change will normally generate high levels of disturbance to the organisation or department’s core business. This has also been our experience since we started working in this new way; the more we treat change as an opportunity, the quicker and easier it is to bring it about wherever it is needed.
Putting it into practice.
Change as a way of doing business.
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We had a lot of preparation for everybody to understand what continuous change means for the business and its importance. I hope that you can also see how this links to our last discussion about triple-loop learning (2 April 2023 Newsletter). We started to change our beliefs around change and instead of dreading it, we started to ask ourselves “how can we apply this different approach?” and “how do we decide what is right?” Our three coaches all said, “the best way of answering those questions is to try it out and learn from the highs and lows of doing things differently provided it fits within the change principle, which I will explain in a minute”.
The effectuation perspective helped us here. We realised that at the end of the day, most risks were affordable if we thought them through and considered the alternatives, one of which was the cost of doing nothing. Our CEO was also key here.
He demonstrated his trust in us by suggesting we start the organisational change in one of our three major businesses and learn from this before moving across the rest of the business. Together with our three coaches, the CEO, directors, and numerous representatives of all levels across the three business areas joined in a series of workshops. They discussed the current state of the organisation and the most suitable place to begin our adventure into what was then very much unknown territory as to what this change really meant.
Eventually, Transportation was our chosen area because it is going through so many challenges currently, ranging from technological advances in alternative fuels, energy sources, and associated engineering impacts, through political demands, to individual versus mass transport, and more. None of these challenges fitted any single solution or approach and so we already knew that one of the major organisational needs was to increase our collaboration across the organisation in ways that we have only done in the past using our “informal networks”. In the past, our various informal networks were our lifesaver and is probably the main reason we were still in business; we succeeded in spite of the bureaucracy, not because of it.
So, we set off with our coaches and their building blocks to build our version of Futocracy.
[Note: for a wider understanding of the numerous forms of informal networks and their importance in organisations read our 26 June and 3 July 2022 newsletters.]
How we moved from the traditional hierarchical organisation to the current business operations is for another day. I just want to explain how this background history moved us to a position where ‘change management’ has become an asset as opposed to a barrier to work.
Change comes to us through different routes.
From the top — down; customer requests; supplier requests; operational insights; and more…
Changes in organisations not only come from a variety of sources such as those I mentioned earlier, but they also enter the organisation itself via different routes. For example: the CEO working with the Board decides to enter a new market as part of their strategy and issue instructions to the PaT accordingly; customers want to modify an existing product or ask for a new type of product and this will often enter as a change request to specific teams via sales and marketing; suppliers often suggest different materials or components because of shortages or pricing strategies through our supply change management teams (SCM), which may mean modifications to the product design or production; our colleagues themselves will often identify different ways of doing things based on continual improvements, all of which need to be circulated around the business teams; technology changes are ongoing and can come from all of these entry routes, and so on.
Whatever the entry route is, we have one “Change Principle” to support how change happens. The principle is supported by a series of instructions, guides, and processes that are congruent with and aligned to all the other organisational principles such as “customer relationship”, for example. Remember that we are an organisation built on principles, starting with the five Futocratic foundational principles.
Reminder of the five Foundational Principles of Futocracy:
Organise around the work
Autonomy — (independence) through distributed authority and decision-making
(Strategic) Entrepreneurial mind-set
Purpose alignment
Transparency
Our overarching “Change Principle” focuses on continuity of the five Futocratic Foundational Principles (20 November 2022 Newsletter). If a proposed change does not support those five principles, then we must re-consider its value, irrespective of its source. In such circumstances the PaT, together with the source of the change request, will decide whether to go ahead with that change. In rare situations, our CEO may be involved in such discussions, particularly when he is the source of the change request. If the proposed change supports and/or reinforces the foundational principles, then it can go ahead.
Change Principle
All changes MUST support and/or reinforce our Five Foundational Principles.
Change can be very simple or very complex and much in between. However, irrespective of its complexity, all change has an impact across the wider organisation. For us to have a successful approach to change implementation as part of our “normal business” for the most part, then we needed to ensure that everybody follows a standard process for ensuring its application as well as taking care to update the wider operational relationships and ways of working together. This is where our “Change Principle” support mechanisms come into play.
As with all of our principles we have a comprehensive set of Instructions, Guides, and Processes, which are important for you to understand and work within because they support your decision-making.
Next time we meet, I will go through these with you as you have probably had enough from me for this session.
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