My copy of Nicholas Taleb’s The Black Swan, a book about risk and uncertainty, was almost destroyed by a freak hurricane (at least it was freaky for a Brit who had then just arrived in the US). Almost, but not destroyed: I was able to use it to write my last post which concluded with Taleb’s advice that instead of investing in trying to predict the problems we may face in the future, we should invest in preparedness.
Don’t pack a raincoat
Being prepared in a very uncertain world is more about being adaptable than it is about being prepared – at least in the sense of “being prepared” that your mum implies when she says, “It might rain today so take a raincoat”. When you’re thinking about the weather the world is quite uncertain. You may not be sure if it’s going to rain or stay dry, but you can fit the kit you might need for either scenario in one rucksack. In a very uncertain world, no rucksack is big enough. If we lived in a world where the range of climatic possibilities could include the ten plagues, purple rain, asteroids, or something altogether inconceivable, you could never pack for every eventuality.
The world we live in today is more than ever very uncertain. In such a world, making predictions is almost impossible and being fully prepared is very difficult. What is possible is to prepare to be adaptable.
Do adopt characteristics of smallness
One survival strategy is to be adaptable by staying small. For businesses, if you can be small and keep costs low you may be able to adapt to disrupting shocks that destroy other less nimble competitors. If you’d been a tiny team of entrepreneurial journalists publishing a niche magazine in the nineties you might have found it easier to move your business online than had you been a multi-title conglomerate with a printing press and a fleet of delivery trucks.
Writing about education, Max Haimendorf and I said that schools need to be smaller, but that being small is not enough. They also need to adopt a series of behaviours and structural changes to give them (in a phrase that I’d like to say we coined) the characteristics of smallness. (For a pretty encouraging evaluation of New York City’s small schools see this paper, which similarly talks of smallness as an enabler of other positive traits.)
I wanted schools to cut out all the peripheral and ruthlessly prioritise outputs (and, in truth, only the final outputs that count: those national exams and, ultimately, getting kids to university); to reorganise teachers around achieving those outputs for a defined cohort of pupils; to eliminate subject silos and many auxiliary roles, forcing all staff to be expert teachers and not administrators or even necessarily subject specialists. I wanted teachers to work exclusively with one cohort of pupils, and within each cohort for every pupil (and every parent) to have one principal teacher, in order to make accountability unavoidable. Instead of being collected infrequently in end-of-term exams, (formative) assessment data would be collected every week at a minimum.
I think there may be some principles in these characteristics that apply to organisations generally, not just to schools. My version of our vision to remedy education was of schools as lean start-ups: small (“human scale”) teams of teachers taking absolute responsibility for achieving an outcome they’ve defined with a simple set of metrics.
Not characteristics of bigness
The characteristics of smallness were, for me, a response to the crippling diseconomies of scale I’d observed in schools (diseconomies that I’d argue far outweigh any positive economies of scale). Big in itself is not bad, but some of the characteristics of bigness are.
One characteristic of bigness is the tendency in the face of complexity to attempt to break down your organisation into ever smaller functional roles. Like many bad strategies this is a strategy that maybe won the last war (or the one before that) but is unlikely to win the next. Obsessive specialisation within your own processes worked for Henry Ford, but I’m not sure it’s right for most organisations today. In business there are scenarios in which requiring your employees to do only one thing very well may be sensible, but it is often the response of a company that is struggling to eke out efficiency in the context of falling margins or a product that is becoming commoditized. If what your people can do is restricted to a very narrow set of tasks, it leaves your organisation vulnerable to unexpected events that change the game and so require something else of them. In some cases businesses are feeling the effects of an approaching, disrupting storm but are betting that they can predict the nature of it instead of preparing for the adaptability that will be required once it has hit (indeed they may be investing in the very things that will make it harder to recover). In Taleb’s extremely uncertain world the characteristics of bigness are especially damaging because they undermine adaptability.
There are other characteristics of bigness (high communication and cooperation costs, anonymity, extraneous auxiliary processes…), some of which can be ameliorated by technology, some of which can’t. I think, though, that if an organisation is going to succeed in this increasingly (exponentially?) uncertain world, it needs to think about how to prepare to be adaptable, and that one way to do this is to adopt characteristics of smallness.
Max and I wanted small schools to adopt the characteristics of smallness because we’d observed what happens when big schools adopt the characteristics of bigness. It’s also possible for small organisations to (disastrously and mistakenly) act like big ones. (One clue that a company may be doing this is when it finds itself investing in the blunt machinery of organisation, like hierarchical structures and formal reporting lines.) But, the exciting (and maybe the obvious) question is, can big organisations act like small ones? Can big organisations adopt the characteristics, but not the actual smallness? Could you – by building highly aligned loosely coupled teams networked together – scale the characteristics of smallness while avoiding some of the worst effects of the characteristics of bigness? The guys at Netflix, who wrote my all time favourite PowerPoint, seem to think so.
What do you think?