for tur­bu­lent times

Boot camp for the in­ert Or­gan­i­sa­tional dy­nam­ics

Finweek English Edition - - People -

DON SULL TALKS in a swift bari­tone, words waft­ing seam­lessly into sen­tences that stretch the imag­i­na­tion. Pretty much like he writes. It’s ex­as­per­at­ing. The voice on the phone is an avalanche of lofty ideas: about or­gan­i­sa­tional modes, about busi­ness strate­gies and about es­o­teric ex­trap­o­la­tions from em­pir­i­cal data of how busi­nesses should be­have. “It’s boot camp for ex­ec­u­tives,” Sull says, his voice flit­ting be­tween the­ory and prac­tice, past and present. Boot what? “Ba­si­cally, a crash course that crams into a short, in­tense pe­riod of time a de­sign on busi­ness the­ory and prac­tice that forces busi­nesses to think about in­cen­tives and bring­ing in the right peo­ple. It’s about adapt­ing.”

While I could eas­ily be read­ing the stuff in Eric Bon­he­icker’s sem­i­nal work Evo­lu­tion­ary Eco­nom­ics, it’s now Sull’s voice sug­gest­ing if you want to un­der­stand the art of busi­ness lead­er­ship you should grasp two “con­so­nant” fac­tors. “In rel­a­tively sta­ble mar­kets the boat was mov­ing fast and its oc­cu­pants thought it was be­cause it had a big en­gine. But it was the tail­wind.” The point? “The boat drifted out of boom-time con­di­tions into choppy wa­ters on a blind sail. En­vi­ron­men­tal change over at least the past 20 years forced adap­ta­tion. Now it’s not enough for lead­ers to craft the “per­fect strat­egy” and ex­pect the mar­ket to co-op­er­ate.” Right, so what’s the al­ter­na­tive? “Thing is, a two-year course de­signed by Ivy League in­sti­tu­tions like Har­vard needed a vi­ta­min boost. In a few weeks we had to cut the fluff out and get lead­ers to adapt to se­ri­ous en­vi­ron­men­tal changes.”

Those con­so­nant threads evolved into a for­mi­da­ble Har­vard study by Sull a decade ago into suc­cess­ful and failed busi­nesses in volatile mar­kets. “No­body could pre­dict the fu­ture any more and a mis­match be­tween the­ory and prac­tice led to my re­search ques­tion. Be­sides, most re­search was in the United States, which led to idio­syn­cratic gen­er­al­i­sa­tions that couldn’t be re­pro­duced in volatile mar­kets.”

Though the re­search agenda may be less mys­ti­cal, but be­fore we get to the nub what of the pro­lif­er­a­tion of stud­ies by busi­ness coaches into or­gan­i­sa­tional dy­nam­ics?

Which is all well and good, says Sull. “No­body had de­signed a re­search agenda that looked at a mix of in­dus­tries in tur­bu­lent coun­tries – such as Rus­sia, In­dia and China – and probed whether the un­der­ly­ing driv­ers of volatil­ity were dif­fer­ent in emerg­ing mar­kets.”

Per­haps. In fact, Sull’s study was, in a large way, an at­tempt to find valid and cre­ative an­swers to such ques­tions. Over a 10-year time­line Sull set out to gather a com­bi­na­tion of case stud­ies of com­pa­ra­ble com­pa­nies.

“One of the high level find­ings was that most firms in tur­bu­lent times fo­cus on or­gan­i­sa­tional strat­egy. But the only thing we know about strat­egy is that it’s wrong.”

All a bit scholas­tic, but the point’s well made. Sull’s view is that com­pa­nies get stuck in a “feel good” mode by adopt­ing strate­gies that ex­clude a lot. The at­ti­tude of lead­ers, he says, is of­ten keep­ing un­cer­tainty sub­dued – even if that means ex­cis­ing the un­savoury bits.

“We go out of our way to un­der­stand com­pe­ti­tion but sel­dom grasp that the map we con­struct is out­moded,” Sull says. “Most firms fo­cus on or­gan­i­sa­tional changes that fo­cus on mid-term goals. They re­cruit the best and bright­est minds in the world. But if you don’t un­der­stand change the best and bright­est will count for lit­tle.”

And it seems or­gan­i­sa­tional adap­ta­tion is the point.

“Once you recog­nise your strat­egy isn’t go­ing to be com­plete – and may even be wrong – your fo­cus has to shift to chang­ing your or­gan­i­sa­tion. It’s ba­sic hu­man be­hav­iour.”

In­deed, even in his home­town of Ohio in the US, Sull was hardly the change dy­namo he’s be­come. “I was ed­u­cated by Je­suits, who drummed into you their job to save souls but they never taught you about the soul that got away.”

That soul was Sull, who went on to be­come a clas­si­cist af­ter read­ing phi­los­o­phy at the Uni­ver­sity of Mu­nich. Some­where along the way his rem­i­nis­cences of grow­ing up in Ohio brought back un­savoury mem­o­ries of his grand­fa­ther. “He worked for US Steel, which was a lum­ber­ing hulk. Then US Steel went bank­rupt and that got me think­ing: how could a pow­er­ful or­gan­i­sa­tion which de­fined US pres­i­dents be­cause of its in­flu­ence go down, and how could Ohio sud­denly be­come a ghost town?”

The very act of think­ing broke the mould for Sull. And that’s es­sen­tially what Sull has been telling his boot camp se­nior ex­ec­u­tives.

These days he brack­ets his scholas­tic ab­strac­tions into two ac­tive words:

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