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.  

 

 

  

Part III: Leadership and Organization Development by Design - Strategic Agility

Strategic agility is all about leadership thinking and decision making.

Let's focus on thinking. I really like Kenneth Craik's definition of thinking. He proposed thinking is a feedback support process which is both physical and mental in nature. The process occurs between the time we perceive something and the resulting actions. As humans, we decide a couple of things either consciously or unconsciously. Among them are:

1. How long to remain in the thinking process
2. The framework we will utilize to examine our perceptions

A choice to overly lengthen or delay the thinking process can also lead to "analysis paralysis".

In an excellent piece of work titled Mental Models, the authors said, as humans, we tend to see things through mental frameworks we have constructed. The frameworks or mental models and patterns we use can lead us to either course:

1. rectification (correction)
2. reinforcement (keep going in the same direction)
3. redirection (new paths forward)

Therefore, our view of the world, ourselves, what we are to do, and how we are to do it are
dependent on the mental models we have constructed. These models help us to anticipate and clarify our interactions with others and with the environment.

Consequently, according to McKendree, Small, and Stenning, mental models are a tool of thinking and they are constantly evolving models of models. Mental models and representations are so powerful that they can affect not only the rules, procedures, and strategies one holds but also how one performs (Mental Models, 1983). So, in terms of speed and the frameworks utilized, leadership thinking agility is astronomically important. Why?
 

If strategy and the goals of the firm are interdependent, then a mistake in strategic thinking can lead to a mistake in goals established for the firm. How could this happen? Robert Grant proposed agility challenges occur as a result of behavioral and cognitive factors. Included among the factors are:

1. rigidity relative to core capabilities (sticking with core competence no matter what)
2. social pattern disruptions (patterns of collaboration, coordination, communication)
3. perceptions of threats to power (control)
4. and complex configurations between strategy, structure, systems, culture, and employee skills (complexity).

According to Grant, we also have a tendency to lock into common structures and strategies and to prefer what's known over what's to be discovered. The preferences are reinforced by what is called bounded rationality and satisficing. Bounded rationality refers to the limited capacity of humans to process information. The limitation ultimately leads to constraints on the set of choices from which one can select. Satisficing refers to settling for satisfactory rather than optimal performance as a result of the termination of the search for better solutions once a satisfactory performance level is achieved.

Consequently, Hickman proposed the response to the environment is a critical and systemic thinking challenge for which leaders have to be adept at conceptualizing their strategic insight. Leaders have to be adept at surfacing their thinking and associated underlying assumptions in order to understand how they operate to undermine their own intentions. Again, thinking ability is critical because as Odiorne (1979) explained, a mistake in goals will produce a mistake in activity.

So, what is an L&OD professional to do in the face of these challenges during complex and chaotic times. Well, to use a Becky-ism, proposing that "it is 5 o'clock somewhere" is not the answer. This Becky-ism was the cue that it was time for Happy Hour and the alcohol that comes along with it. Yes, and one must soberly face up to these challenges.

The key as an L&OD professional is to examine underlying assumptions as part of the work. If true clarity and communication is to be attained, then this level setting step should not be missed. Why? Because, in my experience, often the underlying assumptions are different for each key decision maker. Further, the key decision makers may also not be on the same page regarding key terms or words they are using to describe the circumstances or solutions.

So, is everyone really on the same page and singing from the same hymn book? Are we just assuming so? Would you think it probably important to have clarity regarding assumptions for alignment, change management, and true sustainability of solutions implemented. As a very wise and wonderful leader once said, if the assumptions are right then the options to deal with the challenges stand the chance of being right.

The next post will include a discussion of three strategic organizational frameworks leaders may be using to make decisions. 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

This post contains an "ism" from a former colleague, Becky Hall. She could easily come up with quips to add humor to any situation. Of course, no alcoholic beverages were allowed during the course of a work day from 8:00 a.m. until 5:00 p.m. at any time. So, at various times during the day, if a heavy conversation led most of us to think we needed to be at Happy Hour immediately, then Becky would break the tension by saying, "Well, it's five o'clock somewhere!". This was, of course, a joke! Thank you for the humor Becky.

References
Craik, K. J. W. (1966). The nature of psychology. Stephen L. Sherwood (Ed.). Cambridge,
          United Kingdom: Cambridge University Press.
Grant, R. M. (2010). Contemporary strategy analysis (Seventh ed.). Chichester, United
          Kingdom: John Wiley & Sons, Ltd.
Hickman, G. R. (Ed.). (1998). Leading organizations: Perspectives for a new era. Thousand
           Oaks, CA: Sage Publications, Inc.
McKendree, J., Small, C., & Stenning, K. (2002). The role of representation in teaching
           and learning critical thinking skills. Educational Review, 54(1), 57-67. Retrieved from
           http://web.ebscohost.com.library.dub.edu:2048/ehost/pdf? 
           vid=5&hid=114&sid=63b1980c-eb34-4915-b639-892cf7e89aa5%40sessionmgr102
Mental Models. (1983). In Dedre Gerner and Albert L. Stevens (Ed.). Hillsdale, NJ:
           Lawrence Erlbaum Associates. Retrieved from http://www.questia.com/PM.qst? 
           action=openPageViewer&docId=55455342#
Odiorne, G. S. (1979). MBO II: a system of managerial leadership for the 80's. Belmont,
            CA: Fearon Pitman Publishers, Inc.