Deconstructing Risk Aversion

by Kent Aitken

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A year ago a friend joined a new government organization, and one of the things she was struck by was how frank, honest, and transparent the external communications were.

Since then, my friend started writing a lot of the deputy head’s speeches. Not as a part of a communications branch, but as a strategic planner. At which point one of the explanations for the frank communications became clear: after a first draft, she sits in the deputy head’s office and talks it out with them to make edits. Just the two of them, while the four layers of management in between do their jobs elsewhere. 

The public service is risk-averse, they say. And when these people - whomever they are - say it, they usually mean it in a bad way: as a barrier to innovation, as a bottleneck to information-sharing or stakeholder engagement, or as a tendency to opt for safe and uncontroversial policy options when a much better policy option carries some chance of embarrassment.

I’d like to add a boring and functional possible explanation for that, alongside the usual slate of media, watchdogs, auditors, and career protection. I’d suggest that risk-aversion is a borderline inevitable function of how we approve things.

Here’s the long story short:

• The time demands on senior executives allow little flexibility
• Everyone in an approval chain approves everything about a proposal: not just the content, options, and recommendations, but the grammar, font, and format, and who else approved it
• It’s worse than just approval; layers of management have to both personally approve of a proposal, but also A) believe that the people above them will approve it, and B) believe that those people will believe that the people above them will approve it (see: Where Good Ideas Go to Die)
• There is rarely if ever direct communication between layers of the approval chain more than two steps apart
• The goal when sending recommendations and questions for approval is to have things go up the approval chain exactly once; there is no mechanism for exploring possibilities or asking clarifying questions (e.g., “If the parameters are X, I recommend action A; if the parameters are Y, I recommend action B.”)
• This is exacerbated because of the time demands on executives and how direction can shift - things tend to get approved at the last minute which completely rules out any two-way interaction with the final approver

All of which creates powerful incentives towards boring, safe, and precedented recommendations and external communications. There’s no time or mechanism to explore options and explain complex rationale.

Getting back to my speechwriter friend, to draft a frank and honest speech in an approval-chain/game-of-telephone system, she’d either need to send recommendations up long before drafting the speech and get clear parameters that all approvers would abide by, or she’d have to send two versions of the speech: one safe and “approvable,” and one frank and honest. And no one has time for either approach.

Her example provides one of the possible solutions: connecting the subject matter experts and the decision-makers (in many places around government, this already happens). Which has its downsides, sure. Analysts would have to learn an entirely new bedside manner, and some would be better at it than others. But that’s just a learning curve. And there’d be a lot more subject matter expertise in the room when decisions are made - which I think is a better deal for both sides of the table.

Risk Aversion in Hierarchies

by Kent Aitken

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This is essentially a two-year delayed corollary to Where Good Ideas Go to Die, about the nature of hierarchies and how they influence decision making. I'm not suggesting that either model is an ironclad rule - they're simplifications with much room for exceptions, but hopefully worth considering as food for thought.

A central feature of large organizations is delegated authority: establishing a mandate and structure within which officers can exercise authority on behalf of the organization. For instance, one might have authority to spend money on certain things, up to a limit, without additional approvals.

That said, not much "big" stuff is left to delegated authority. It may be for reasons of accountability or importance, or because "big" stuff either impacts different parts of the organization or requires cooperation for implementation. So many proposals get approved at each level, then continue up the chain of command.

However, refusals are almost always left to delegated authority. That is, if a level of management decides that a proposal should go no further, it stops. The level above does not necessarily hear about it. So a given level of management makes very few final "go" decisions on behalf of the organization compared to the number of "stop" decisions. For instance, an executive will know every employee's proposed training plan, but not what was struck off the plan by the level of management below.

False positives (poor ideas that get recommended) get caught by the system, by a higher layer of management. False negatives (good ideas that get stopped) don't.

Accordingly, false positives result in feedback for the person who recommended approval. That is, proposing an idea up the chain of command and getting a “no” provides information on which to base future proposals. Those who are too risk-tolerant will get reined in. However, false negatives get no such feedback. Managers who are too risk-adverse, wrongly making “stop” decisions on behalf of their organizations, will remain so. This also means that senior executives will systemically underestimate the level of risk aversion in their organizations.

Alternatively, instead of it being different managers' styles, it could be individual managers who propose too much in some areas and too little in others. A manager could be risk-adverse on communications but overly ambitious on staffing requests. The latter would get corrected, the former would go unchecked.

I'm sure that when a decision-maker is uncertain, they'll often check in with their management. But given the scale of organizations, the desire to minimize demands on senior executives' time, and the sheer volume of proposals moving on a given day, there's room for error. In a large enough organization, over enough time, tiny breakdown rates still mean a lot of breakdowns. Small asymmetries in the forces influencing decisions add up.

Maximizing the Value of Talk and Ideas

by Kent Aitken

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Note: I’ll be at the Digital Governance Forum today (January 28-29, 2015). Drop me a line if you’re there and say hi.

Last week I wrote about the unnecessary villainizing of talk. I worried that we subtly discourage the sharing of, and discourse around, ideas that are less than fully formed.

There are also times to rightfully skewer talk. It obviously does occur that an idea should happen and doesn't due to a lack of follow-through. But the more interesting cases are when it’s not solely a matter of personal responsibility, but rather, the requirement to productively fold such talk into a hierarchy.

Where last week's post was about talk in general, this one will focus on asking for input, and in particular, what we hear back.

Ideas plus Hierarchy

Complexity Kryptonite

Collaboration bests complexity. It helps us suss out hard-to-see impacts of our actions, reveals our ideas' redundancy, and helps us improve our plans.

This collaboration could be requesting meetings with experts, bouncing ideas off colleagues, facilitating working groups, or running engagement activities. For all of these, there is a worst case scenario that I detest: asking people for their time then being unable to turn it into something productive.

I learn a lot, and I love the discussions, but it’s not enough.

And it's particularly hard in large organizations. Those soliciting ideas and those approving them have different incentives and mandates, and different information about the exercise. It’s no one’s fault; rather, an inevitable product of hierarchies.

Often, it’s a personal failure on behalf of the idea steward, the person tasked with analyzing the talk - ideas, feedback, input - and moving it forward. I have to admit to this - failure to understand my environment, to frame and communicate ideas well, and to give those ideas a chance of success in the hierarchy.

So, I'd like to explore three approaches that stack the deck for those ideas in a hierarchy.

1. Get In Front of Your Process

What do you have control over? Actually, really, reliably?

You need to know your role and limits, inside out - and be transparent about it. It’s far more powerful to have done that up front, than to have to answer the question when asked.

For example, SpaceX CEO Elon Musk is currently destroying multi-million dollar rockets trying to get them to land on a drone ship off the Florida coast. His tests can end in fiery explosions yet he retains trust, because of how he sets expectations and lays out the chances of success beforehand.

Next rocket landing on drone ship in 2 to 3 weeks w way more hydraulic fluid. At least it shd explode for a diff reason.
— Elon Musk (@elonmusk) January 16, 2015

@ID_AA_Carmack Full RUD (rapid unscheduled disassembly) event. Ship is fine minor repairs. Exciting day! pic.twitter.com/tIEctHFKHG
— Elon Musk (@elonmusk) January 16, 2015

(For a non-explosion-based example, I’m very proud of my colleagues’ work on this report following a massive consultation.)

We’re in this for the long haul, and projects don’t supersede relationships. Promise where you can, and admit it where you can’t.

2. Get Others in Front of the Process

If you're the liaison between the hierarchy and the universe with which you collaborate, you're in the best position to understand both. Lay out what is expected of both collaborators and the hierarchy you represent. This is where "plans are useless, but planning is indispensable".

Is someone's commitment required to make this collaboration or dialogue a success? Make sure they see or approve the plan, and make them part of the story, by name or by position. As explicit as "At this point, X person will do Y."

Make them promise where they can, and admit it beforehand where they can't - so you don't over-promise on your organization's behalf.

3. Make it Easy for the Hierarchy to Internalize Ideas

The showstoppers get done. What about the bulk of simply good ideas?

The typical approach after brainstorming is over to send around a set of summary notes. But, it's difficult to contextualize a mass of notes. There's no visual hierarchy to provide cues about what's important. Essentially, we're expecting our audience to simultaneously identify good ideas and assign responsibility to themselves or others, from an email that looks identical to the hundred others they'll receive that day.

Here's an example alternative. Following the last big workshop I ran, I listed the dozens of action phrases that followed some variant of “we should”, “you should”, or “the organization has to”. For each, I introduced the idea, then walked my team through these questions:

Idea	Should we do this?	Now, or later?	Us, or partners?	How?	Are there alternatives that achieve the same goal?	If partners are handling this, what do they need from us?	Who, specifically, is responsible for this?
"We should X"

It doesn't have to be as structured as the above, but the principle stands: it's much easier for people to walk through a series of small, concrete steps. And it's much easier to take ownership of an idea - the "Who's responsibility is this?" question - after working through the how and why, even briefly.

Why?

I love meeting with people, talking and learning new things, and hearing new takes on subjects. Those interactions are resoundingly worthwhile. In the end, it's so easy to share ideas with others, to ask for feedback, and to give help. So, even if it's relatively rare that you really, truly connect and improve the idea, it's worth it.

Yet, if we can further honour that time by maximizing the chances of those ideas positively influencing the systems in which we work, we should.

On Influence and Hierarchy in Bureacracies

by Nick Charney

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In bureaucracies we often mistake hierarchy as a proxy for influence.

But my view is that hierarchy is knowable, straightforward and discriminate, whereas influence is elusive, subtle and complex.

I consider hierarchy as akin to a hard power, influence as a soft power. And I've always been more interested in soft power then hard. My career path has been one of relationships over level and rewarding work over the greasy pole. My modus operandi (see: Scheming Virtuously: A Handbook for Public Servants) has never been about acquiring or pulling rank but rather building, safeguarding and levering reputation and ability to influence.

While I fully admit that sometimes influence flows from hierarchy and that those who ignore hierarchy ignore it at their peril (myself included), I also believe that it is increasingly the case that influence flows from some undefinable blend of serendipity, panache and resolve. I think we tend to prefer hierarchy because it offers the illusion of certainty and allows us to ignore the fact that influence is messy and that it can be neither poured neatly into an organizational chart nor contained within the strict limits of its boxes. And so our bureaucratic cultures continue to mistakenly treat hierarchy as a proxy for influence.

A likely example most would be familiar with is the Executive Assistant (EA) who is actually more like an Executive Director (ED) than an EA.

In my experience, many EAs don't have the rank they ought to. The ones worth their salt (and I've worked with many) are in fact more like EDs. Yes, they may have the tedious task of managing an executive's calendar but they are also the only ones trusted to do so; meaning that if you are the one requesting a meeting with your boss you are essentially at the mercy of the EA.

Now, it's easy to discount them but they have better access leadership and information flows than most - just by way of where they sit. The really good ones are easy to spot: they build skills and subject matter expertise, they sit at management tables, they have their boss's ear and they follow them from one job to another (and/or spend their entire careers in similar roles).

But I digress. All of this to say that the influence isn't a corollary of hierarchy and that many ignore that fact at their peril.

My hunch 

Actors without hard power tend to be better at wielding soft power because they have to, whereas those with hard power are weaker at wielding soft power because they don't. In other words, if hierarchy privileges you, you needn't worry as much about how to influence others, whereas if hierarchy doesn't benefit you, then you need to. As I'm reflecting on this I'm wondering if there is a tipping point (not in the Gladwellian sense) somewhere along your career trajectory where your levers and/or approach changes because there are suddenly more people below you than above you within the system.

This is not a slight to those on either side of the divide, nor do I think it's a hard and fast rule. It is an observation that may explain some of the interpersonal dynamics at play within bureaucracies that so many people find bothersome; namely, executives pulling rank on folks without it and/or folks without rank disrespecting and side-stepping the hierarchy.

What do you think?

Idealism and Pragmatism for Organizations

by Kent Aitken

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Chelsea recently walked through some considerations about loosening hierarchy, and put a question to her "renewal-minded" audience about how every change impacts each person differently. So for several weeks I've been thinking about the difference between the theoretical ideal and the practical ideal for an organization. I commented on Chelsea's blog that it's possible that the goal should be a system that we all know is sub-optimal, but that is more reliable for more people. A rowboat's less effective than a speedboat, but much harder to break, easier to learn, and easier to repair.

The Best and the Best Possible

This leads back to questions I left hanging in my post about the changing demographics of public service, possibly leading to a different approach to problems and solutions (see: Lego, Millenials, and the Perimeter of Ignorance). Is that idea actually characteristic of the majority of people in an organization? Like the flat hierarchies that Chelsea explored, what's the impact on everyone involved? It's very likely that my anecdotal evidence, that people could work in such environments, is based on a biased sample.

I started imagining a graph with potential on the vertical axis and feasibility on the horizontal. Perhaps many organizational systems that would be speedboats - incredibly effective for their intended purpose - sacrifice too much feasibility and so are unreliable, expensive, or overly demanding on people.

Two Alternatives

Organizational pragmatism seems like a reasonable position, but I see alternatives.

One, I frequently think that we go too far sacrificing principles for outcomes, ignoring - even if we think we're being perfectly pragmatic - the long-term impacts, and how we're sending signals about what is important. I wrote back-to-back posts about the pragmatic and principled approaches, applied to the idea of hiring a generation of demanding, impatient employees:

• An Argument for Renewal, Part I
• An Argument for Renewal, Part II

Saying "I know this isn't right, but it's what we have to do for right now" is a dangerous road that gets walked too often.

Two, the rowboat-speedboat analogy is loaded - it implies that the effective system is expensive, complex, and involves many moving parts. It could instead be like a flock of starlings - a complex whole based on individually very manageable principles. The graph could be flipped on its head, and feasibility doesn't necessarily have to decrease as potential increases.

The organizational system that requires every employee to behave differently? That's a speedboat. It doesn't have to be like that.

Through the Looking Glass: How Google Glass Could Radically Change Your Organization

by Nick Charney

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A couple of weeks ago I read an article in Rolling Stone entitled "The Future of Movies: How Will Google Glass Change Filmmaking?". While it was obviously focused on the how Glass will impact the film industry, reading it sparked an idea about how organizations could lever Glass to better understand their day-to-day operations.


The idea is simple

1. Grab a junior employee, a low level executive, a mid level executive and the head of the agency; ensure they are all a part of the same reporting structure;
2. Equip each one with Google Glass;
3. Have them film their entire work day on a day where they typically interact with one another; 
4. Sit them all in a room together as all four videos simultaneously in a split screen; and
5. Engage them in an honest and professionally facilitated conversation as the movies roll. 

What might you see? Perfect alignment? Fodder for a revamp of Yes, Minister? Or something in between? 

In fairness, it likely varies from organization to organization. That said, I get the sense that information asymmetries is likely to be a key finding of any such experimentation. 

What do you think? 

Is your organization courageous, desperate, or driven enough to peer through looking glass?

And if so, what do you think they would find?

 

Where Good Ideas Go To Die

by Kent Aitken

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A year ago, I wrote a post about how and why good ideas face resistance (see: Renewal and Resistance). Today we still can't swing a good idea without hitting a Clay Layer*, and I thought that it was about time to revisit it.

The Clay Layer is this amorphous, eternal layer in the middle of organizations "through which no light shall pass,” and to which no one admits being a part of. It is where communications and good ideas go to die. People send ideas on journeys down or up the chain, seemingly with all the supplies needed, but never hear word from the destination.

Here's how it works: The President of an organization has a Great Idea. They instruct their lieutenants, the VPs, to make it happen. The VPs turn to the directors, who tell the managers, who tell the supervisors, who implement it with their employees.

Except they don't.

This Machine

In some organizations the Clay Layer may actually be a management layer. In others, it could be people, policies, or processes. But my contention was that it is more so a mathematical inevitability.

Hierarchies and ideas just don't get along. If there is anything less than unconditional support for a given idea, every layer in an organization represents an opportunity for support to break down. Worse, the chance for resistance, or non-support, at each layer compounds, multiplied by each additional layer.

So, the chance of meaningful implementation of that President's Great Idea is equal to:

Where x is the chance of support and y is the number of nodes in a hierarchy. It's y-1 because presumably, the President has 100% support for the idea.

Expanding this example, with 6 nodes (a President as node 1 and an employee as node 6), and a 85% (dare I say high?) chance of support for an idea:

0.85*0.85*0.85*0.85*0.85* = .44

So, 85% of the people in this organization would individually, if they ever heard about it, support the President's idea. But when the machine manufacturing it is a hierarchy, it has less than a fifty-fifty shot at success.

Or:

The Solution

The Clay Layer isn't a management layer, it's a function of the organizational system. So if there is a shred of truth in this, the approach seems clear as we try to get Great Ideas' success rates as close as possible to 100%:

• Minimize y: reduce the number of layers involved by flattening organizations
• Maximize x: ensure high rates of support for ideas through compelling presentation, cultural norms, and sheer persistence and reinforcement of key ideas

But there's an unfortunate corollary to our equation. The President will systematically underestimate how much they need to reinforce ideas (maximize x), because progress reporting has the same flaw: any inaccuracies in reporting compound at each level of the hierarchy. And every node has an incentive to overstate their level of support, and the level of success.

So, one has to disrupt the features of hierarchies. If the President receives feedback from multiple levels, they can better understand the implementation of their ideas, and adjust their approach if needed. Likewise, if the President can directly engage multiple levels and empower them in the implementation, the assumptions on which this equation rest dissolve.



*Nick has written about the Clay Layer at least once before. 

Actually, for that matter he also wrote a post called Where Good Ideas Go To Live And/Or Die.