Part IV: Leadership and Organization Development by Design - Strategic Organizational Frameworks

What was I thinking? Isn't that the question we most often come up with when we fail at something? Well, as discussed in the last post, leadership thinking and decision making is astronomically important. Why? Because, as Odiorne and Grant remind us, mistakes in strategy lead to mistakes in goals and mistakes in goals lead to mistakes in activities. Can you imagine the significant waste of an entire organization's members leaning their ladders against and climbing the wrong walls? If the organization is a United States publicly traded company, then this waste is typically recognized quickly and brutally punished on Wall Street. This is as it should be! Whether the organization is on Wall Street or Non-Profit Corner, leadership thinking and decision making matter in the creation of value. 

 

What does Hodgkinson have to say about it? He said if an organization's strategies are shaped by the mental models or frames of its leaders, then we should study the models or frames to understand the processes and mechanisms through which strategies are formed and changed. Hodginkson documented three frames for creating managerial and organizational strategy. The frames are:

• economic
• organization theory and
• cognitive

McGee argues effective strategies are a result of the careful inclusion of elements of all three frames.

So, let's take a closer look at each frame.

In the economic frame, the experiences within the world can be placed into boxes. The experiences within each box are the rational outcomes explained by general economic laws. For example, prices rise when demand is greater than the supply. McGee proposed the problem with the frame is its simplistic underlying assumptions about individual and collective behavior. In other words, one size is a fit for all.

 

Essentially, McGee challenges whether the linear thinking, no-frills application, and rear view mirror perspective of the frame are appropriate responses to intricately complex situations.

 

The organization theory frame essentially emphasizes the economic model. Its “principles of specialization and coordination are means of simplifying and rationalizing the organization’s behavior” (McGee, 2005, p. xvii). The specialization or division of labor lends itself to hierarchical, silo, and bureaucratic behavior.

 

The problem with the frame is similar to that of the economic frame. Difficulty arises from its simplistic assumptions about individual and collective behavior.

 

Hodgkinson’s cognitive frame for creating managerial and organizational strategy is characterized by strategic thinking. It is built on the argument that the difference between success and failure can be attributed to the extent to which leaders can make sense of and respond to rapidly changing and difficult situations.

 

Making sense of situations or circumstances requires leaders to be capable of interpreting information as close to reality as possible. Sense making is also required in the context of complexity.

 

Hodgkinson wrote leaders in organizations often deal with multiple and conflicting goals and make decisions with incomplete understanding of imperfect information. Therefore, leaders develop a simplified understanding of reality by creating cognitive or mental models that are the outcome of filtering and organizing the multitudes of information they receive. Leaders use the information to shape macro-organizational strategy.

 

What is any self-respecting Leadership and Organization Development (L&OD) professional to do

given these circumstances? We are back to discovering underlying assumptions. The added challenge

 

is to recognize the leader's organizational framework. Is it:

 

1. a tidy one size fits all or stay within the box frame?

 

2. an orderly, chain of command, and control frame?

 

3. a strategic frame?

 

4. or a frame formed by a combination of the above?

Remember...Hodgkinson appropriately proposed the leader's mental frame should be an 

applicable combination of the economic, organizational, and cognitive models. So, would the

use of a consultative approach in which alternatives are offered to the leader based upon an

understanding of his/her thought processes

and/or an offer to support the leader's facilitation

of a discussion with a cross-function of trusted

colleagues in which underlying assumptions

are disclosed and constructively challenged

support better decisions and outcomes?

The objectives of the discussions are 

determination and clarity regarding

approaches (cognitive frame), order

(organizational frame), and boundaries

(economic frame). If L&OD is to be a trusted advisor, then this is the uncomfortable

territory within which a great degree of savvy and influence must be exercised to

help leaders see the water in which they are swimming.

 

 

In the next post, we will talk about environmental dynamism and complexity!

You will gain an appreciation for how these factors affect leadership thinking and decision

making! Until then, ask and answer the right questions in the right way and be the change

you want to see!

Phyllis L. Wright, Ph.D.

View my profile on LinkedIn: www.linkedin.com/in/phyllislajunewright/

Follow @PhyllWright Twitter

References

Grant, R. M. (2010). Contemporary strategy analysis (Seventh ed.). Chichester, United

          Kingdom: John Wiley & Sons, Ltd.

Hodgkinson, G. P. (2005). Images of competitive space: A study of managerial and

          organizational strategic cognition. New York, NY: Palgrave MacMillan.

McGee, J. (2005). Foreward. Images of competitive space: A study of managerial and

          organizational strategic cognition. G. P. Hodgkinson. New York, NY: Palgrave

          MacMillan.

Odiorne, G. S. (1979). MBO II: A system of managerial leadership for the 80's. Belmont,

          CA: FearonPitman Publishers, Inc.