Focus on Discovery, Not Decision-Making, Is Key To Success

9/22/10

We’ve experienced a slew of “system” failures in the last years—corporate, regulatory, financial and technological—with disastrous results. Toyota suffered a huge hit to its sales and corporate prestige. The damage to the Gulf of Mexico is still being tabulated. And we’re even now trying to fully restart the economy after it was crippled by the subprime mortgage failure.

When catastrophe strikes – whether it is huge and public like in the examples above, or smaller and less visible like when a patient suffers needless harm while receiving medical care—the knee-jerk reaction is to blame individuals for being complacently ignorant about how to avoid failure or for being simply too greedy to care. I maintain that this is a wrong interpretation, which leads to the wrong reaction of penalizing the “culprits” and creating even more rules to bar villainy.

The truth is that we’ve come to depend on systems infinitely more complex than previously was the case. Cars, once products of iron and steel, are composed of myriad materials tightly intertwined with advanced computer networks and data processing. One rarely just “goes to see the doctor” now. Rather, you interact with a healthcare system comprised of doctors, nurses, technicians, pharmacists, and others who each contribute their expertise to your care. The good news is that we enjoy products and services of far greater quality, affordability and availability than was ever the case.

The challenge is devising a new approach to managing systems so complex that “thinking our way” to adequate, let alone perfect, designs is impossible. We are now in an age in which management must instead focus on constant discovery and innovation – relentlessly learning better ways to do work and learning that there is better work to do.

Companies which embrace this approach are the ones that consistently hit new milestones, improving their systems at every step along the way. These “high-velocity organizations” are led with a focus on generating and sustaining broad-based, internally generated improvement, innovation and invention. Those that don’t follow this approach are usually the ones chasing, but not catching their rivals. They are the ones that lose relevancy or, even worse, contribute to systemic failures.

Fortunately, this new approach to leadership can be learned even in the most complex of situations. It is based on skills that can be taught, practiced, mastered, and applied with great effect. Better yet, it doesn’t just depend on the inspiration of a genius.

Rather, it starts with the way that managers typically think of themselves, which is usually as decision-makers. However, in this world of ever increasing complexity, making decisions only gets you so far. No set of decisions will actually get you the right answer,  so this is where developing new skills, which I call disciplines of innovation or core capabilities, becomes crucial.

The first step is to design systems of “dynamic discovery” so that they reveal operational problems and weaknesses as they arise. While this might mean … Next Page »

Steven Spear is a senior lecturer at MIT Sloan School of Management and the author of The High-Velocity Edge: How Market Leaders Leverage Operational Excellence to Beat the Competition. Follow @

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  • http://www.TheHackerChickBlog.com abby fichtner

    GREAT article and so true. This is such an exciting time because it’s not just the startups, but all organizations, that get to be continuously rediscovering and innovating. Awesome to think about the greatness and advancements that are sure to ensue.

  • http://wizewerx.com Mike Sutton

    Hi Steven, I think you make some valid and insightful observations around the failures that have occurred and some areas that can be improved.

    Whilst I agree that many managers see themselves as the decision makers – I think it is hugely important that we understand why most do – a possible answers lies in the way our organisations have been built, the rewards and incentives we put in place etc.

    Decisions always have to be made. We both, I think, emphasise a decentralisation of many decisions. But some central decisions still need to be made and in many ways they become more crucial.

    The role of the decision maker is therefore distributed and new skills are needed by management.

    Many of these insights and new skills are well described in the ‘Surfing the Edge of Chaos’ by Pascale et al.

    Without a doubt, it is an exciting time in business.

    Discovery and innovation are central to good decision making, and shorter feedback loops from all sectors of domain make these decisions less risky.

    If I could suggest one way to improve your already good article, it would be to emphasise that good decision making is about high quality factual information and learning. Discovery and innovation are sweet sources of such information.

    cheers
    Mike

  • Global Solutions

    These are excellent observations though their truths are nothing new. If we look at the “game changing” technology companies that have enjoyed the greatest growth and financial success, they arrived under the leadership of the technology expert. In contrast, the companies with “professional management” installed by VC backers usually flop after IPO or M&A. San Diego’s biopharma community demonstrates this fact. Technical leadership tends to focus on product launch while the investment team focuses on exit strategy. Whenever there are conflicting goals, failure will follow. When seeking VC backing, it is usually a detrement to have a PhD by your name so like many other technology businessmen, I have a card for business purposes without PhD and another for use in technical situations. If we can get the financial community to embrace the truths you describe, then we will have a thriving innovative and sustainable industrial sector. Without this realization, we will continue to have only rare success stories.

  • David Munch

    Very Important message and article. A critical component to discovery and innovation is the skill set of coaching, asking the right questions, not giving the “right” answers. In the healthcare environment we have found this to be a great need. If front line workers need to perform standard work, surface problems and solve them, then it has to be not only safe to do so, but expected. The modeling and coaching to this expectation must come from management. In turn, if the managers coach problem solving and improvement, they must be supported in this competency growth by their executives who also must be coaches, not commanders. How will executive leaders gain the skills of coaching, by coaching them. Is is not sufficient to just inform people, they must be coached while applying the techniques.

  • Pingback: When Systems Fail Should We Blame Individuals? The need for dynamic learning in organizations | The High-Velocity Edge

  • http://www.leanexecution.wordpress.com Redge Semplonius

    Steven, this article points to one of the core traits of companies that continue to thrive regardless of the present circumstances. Rather than contend with the current reality, they continue to create and strive for the desired future condition.

    Having read your book Chasing the Rabbit, recently retitled to the High Velocity Edge, I now continue to see a consistent theme amongst the most successful companies today. Despite the flurry of recalls that surrounded Toyota, the company has an innate ability to rise above.

    I have also recently read a book titled “Toyota Kata – Managing People For Improvement, Adaptiveness, and Superior Results” by Mike Rother. It is interesting to learn that Toyota has methodically created an inherent culture of continuous improvement and innovation that extends that through all levels of the organization.

    Toyota Kata addresses both the Improvement Kata and the Coaching Kata (Leaders as Teachers). As David Munch states in his comment, coaching is the key to achieve the desired improvements. Toyota Kata teaches and demonstrates the mentoring strategy that Toyota uses to cultivate an ever improving product and work place.