Brilliant Article by Esko Kilpi
Industrial firms have given us remarkable material well being over the last few centuries, but are increasingly being criticized for not being suited to handling the needs of today. Organizations need to excel in innovation. Companies need to meet new demands for change and need to embrace uncertainty.
The industrial approach to management places a heavy emphasis on the formulation of plans and intentions and then communicating them as actions to be executed by the organization. The belief is that managers can make useful forecasts and set goals. Their daily responsibility is then to monitor activities to identify gaps between the goals and actual outcomes so that the gaps can be closed. Uncertainty plays a minor role. Managers know what is going on.
Every business is a set of assumptions that are taken as given, thus reducing the perceived uncertainty and psychological anxiety. The whole plan–execute cycle is a process designed to prove assumptions correct. The closer you are to the budget, the better it is. But assumptions are never totally right; often not totally wrong either. Accordingly, it is quite seldom that ideas are turned into a successful business in just the way described in the business plan. Things change.
In conditions of rapid technological change and uncertainty, there has to be a systematic process indicating new opportunities as they emerge. What new possibilities have become visible making our present assumptions outdated? This is much more important than forecasting or planning. It is about asking questions, testing the assumptions continuously and signaling which are helpful and which are not. The new cycle is a process designed to prove assumptions wrong.
The task is not the reduction of uncertainty but to develop the capacity to operate creatively within it. Some of the most creative startups have even gone so far as to take a “let’s just do cool things and see what happens” approach, trying to avoid traditional governance systems. The plan-execute cycle turns into a question-answer cycle: “What is the problem we try to solve? How can people participate in testing the validity of our thinking and in such a way that things continuously develop and change over time?”
The strategic focus is an ongoing movement that is open-ended, and always incomplete. The strategic logic is temporal rather than spatial. When following a spatial metaphor, there is a territory that can be explored and understood, but here the territory is seen as being under continuous development and formation by the exploration itself. “It is impossible to map an area that changes with every step the explorer takes.” People inhabit a world of emergence, uncertainty and complex change. Ilya Prigogine wrote in his book “The End of Certainty” that the future is not given, but under perpetual construction: “Life is about unpredictable novelty where the possible is always richer than the real.”
The entrepreneurial experience of work is very different from the industrial experience. It is about acting into the unknown, not necessarily working towards a goal. It is about creating the future together, not about reductionist separations and job descriptions. It is more about improvising together than clear roles and scripts. It is more about emergence than rational causality. By linking improvisation to a community, like in theatrical improvisation, we get to what is in fact happening in creative work. All of us with our differing intentions, hopes and values, are acting in corporate plays. We are self-organizing in shifting social configurations in the responsive interplay of different players.
In creative work, we are fellow-improvisers in corporate ensembles constantly constructing the future and our part in what is happening in interaction. The idea of improvisation is often associated with notions of unrehearsed, unintentional action. However, the more skilled the players are, the better they can improvise. The better people have planned, the more flexible the organization can be. The more intensely people are present, the more reflexive and responsive they can be.
The Internet, technological intelligence and new sensor technologies are creating a real time company. The most important outcome is that we can focus attention on what we are doing and learning in the present rather than on what we intend to do in the future.
The best way to be future-proof is to be more responsively present in the present moment.