Questions & Answers
Introducing Steve McCrone
Friends,
I hope all is well with you and yours.
Over the past, well, what feels like centuries at this point, I have occasionally referred to my new book on the ABCDE framework. However, I have not been able to share much more than a vague outline in the distance. That is about to change soon. Steve and I are steaming ahead – and have set an internal draft deadline of November. Though we are still far from a finished product, I dare say that it is my best written work to this day.
There are no dangers of delusions of grandeur, though:
More information is coming. In the meantime, we are going to conclude our look at Cynefin and begin our next topic: adaptive strategy. As it happens, there is no better person to bridge these two topics than my aforementioned co-author Steve McCrone. If you want a deeper dive into his thoughts, I highly recommend this interview.
So, without further ado, let us get right into it.
For the few who do not know who you are, could you provide a bit of insight into the makings of the one and only Mr. Steve McCrone?
I live in New Zealand with my wife Catherine (originally from the UK), and our two children. (New Zealand is a small rock in the South Pacific.) I am a former Army officer and bomb disposal specialist. My commercial career has been varied; I've worked in renewable energy, merchant banking, HR and consulting – my CV is a list of stuff I never want to do again. But I'm a proud generalist who likes to challenge the status quo, and because of that I'm basically unemployable. So, I've turned my short attention span into a career in consulting through my company AGLX; we are part of a global network of “anthrocomplexity” practitioners. Over the years, I've built a really cool team without ever having job interviews or recruitment processes. Our mission is to bring authentic strategy to the world by doing great work with great clients.
An emergent theme over the last year has been the occasional practical inadequacy of strategic planning. When do you think planning works and when do you think it falls flat?
One of the mistakes people make when they adopt more adaptive methods to strategy is to reject the more traditional planning techniques outright. For me, adaptive approaches to planning build on the traditional methods, without having to replace them. A good example is the project work undertaken by our construction clients. Traditional planning works when you have a clear end state (like a blueprint of the completed building) and a large amount of control over the resources needed to achieve the result. A skilled commercial construction team is genuinely expert at managing the process of bringing all the components together to achieve the result on time and on budget. It baffles me how they do it, and when I see them in action it looks like chaos.
But in the last few years, many organizations which previously felt they had control over their business and their results have also been surprised by how quickly things move out of control and how rapidly their plans become irrelevant. In uncertain times, the more adaptive you are, the better your chances are of finding a way through the disruption. Any plan that assumes a level of control that cannot be maintained under conditions of uncertainty is likely to fall flat.
On that topic of control, strategists often assume that people will execute their strategies without hesitation or alteration. In reality, this is rarely the case. How do you improve the odds of your work being followed through?
Large teams executing their tasks in strict accordance with the strategy are restricted to very transactional work – e.g., manufacturing, data entry or flipping burgers at McDonald’s. In most organizations, execution of strategy is heavily influenced by individuals and teams as they face the changing reality of the market.
Sticking to the plan can therefore be a double-edged sword. People need to have the ability to deviate from the plan when things change in order to avoid failure. Of course, when people deviate from the plan on a whim, or for no apparent reason, you can also have failure or chaos. The key is to establish the strategic intent, or what we sometimes call a shared understanding of success, and provide people with an idea of what the main focus or effort should be in the near-term. Give people the training, resources and support they need to execute the strategy but allow for autonomy in decision making. One has to provide fast feedback and enable open communication – that way the strategists are connected to the reality of the business and can adapt to change. If done well this process itself can become a strategic advantage as you out maneuver rigid competitors and provide a more responsive product or service to your customers. The problem in large organizations is that strategists insulate themselves from the reality of the business via hierarchies and slow feedback processes that often filter out the outliers that can be opportunities for innovation.
The last few newsletters have featured Cynefin, a framework which you know better than most. What, in your view, is the biggest strength of it?
There are two things that I find really useful.
Firstly, that Cynefin is a contextualisation framework. This means that we can experience situations in different ways. To you, something might be Complicated if you have specific domain knowledge, but to me it is Complex. For us, a fire might be Chaotic, but for a trained firefighter it could be Complicated or even Clear. Understanding context allows us to explore and harness different perspectives and diversity becomes an advantage. It also allows us to create and test interventions designed to move us from one domain to another. A process of experimentation, feasibility studies, pilot programs and, finally, fully fledged projects might move an idea from concept to shipped product, from Complex to Complicated. The strength here is using context to take authentic action. Cynefin is a dynamic framework.
Secondly, that Cynefin is fractal. That means that the relationship between the domains is self-similar at different levels of scale. A floret of broccoli is fractal in that a small piece is self-similar to the whole. Humans are not fractal as your arm isn't a small replica of you. This has important implications for strategy, because as organizations grow, the tools, techniques, and frameworks they use need to accommodate the growth. The framework has as much utility at the team level as it does at the corporate level; methods derived from Cynefin have the same fractal quality. A safe-to-fail experiment at the corporate level might involve the multimillion dollar acquisition of a small IT company. A safe-to-fail experiment at the team level might be spending $5000 on a drone. The process of designing, activating, and learning from the experiment is the same. Fractality is also a feature of Pareto distributions that we see in nature, which makes Cynefin a good “fit” for contextualizing real-world situations.
Some people struggle with the difference between that which is complex and that which is chaotic. How would you describe what separates the two, not just in theoretical terms, but in everyday business situations?
I think people struggle with the concepts in the classroom, but not necessarily in the field. If you have time to ponder the question then it's most likely complex. Chaos to me is when you have lost your ability to exert any control over the situation. I witnessed this in a business sense during the Christchurch earthquake in 2011 when a 6.0 magnitude quake destroyed much of the city. My client had to evacuate a badly damaged building. Luckily no one was killed, but unfortunately for them, their server was in the office and their backups in the basement. Their business data, client billing information, key processes and business information were on the server. Without it, their business was never likely to recover. One of the IT guys literally risked his life to go in and retrieve the server. This was chaos – the survival of the business depended on his actions. The area where that building once stood is now a park.
In complexity we have a level of control, but don't fully understand the system; we have some idea what might happen if we act, but need to be ready to react to positive and negative consequences of our actions. We are acting in order to understand the system. A good example is the execution of a marketing plan. We can do as much research and analysis as we like, but we will never really know until we start interacting with people how our ideas will be received.
Alright, one final question. If there is one thing that you could change in how people approach strategy, what would it be?
Strategy is about how we act, not what we do. Strategists should spend more time on understanding context and understanding constraints. It seems that people get enamored with analysis and forget the fact that if analysis alone could allow us to “find” the best strategy, then we would already be successful.
And with that, we thank Steve for taking the time to answer our questions. If you want more McCrone in your life – and who would not? – you can find him on Twitter, on LinkedIn and via the AGLX website.
Next week, we are going to dig significantly deeper into adaptive strategy, a topic which will only increase in importance the farther into the current financially uncertain times we go.
Until then, have the loveliest of weekends.
Onwards and upwards,
JP
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