The Nature of Business Transformation

A Swarm Intelligent Approach to Reinventing Organisations

Richard Kelly

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000535358
• Edition: 1
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

This book is a practical guide for business professionals to develop and improve business intelligence and collective decision-making within their organisation. It proposes a progressive reconfiguration of the traditional business operating system using a nature-inspired framework called swarm facilitation that enables and facilitates collective decision-making.

Organisations have followed the same rigid formula of problem-solving and decision-making for over 100 years. It is dominated by centralised governance and pyramid decision-making. Such an approach is no longer fit for purpose in an environment of employee disengagement, artificial intelligence (AI)/superintelligence, and Covid-19 fallout. By the end of this book, readers will be able to:

• solve organisational problems and challenges collectively using swarm intelligence
• upgrade and future-proof business operating systems to reflect a more collective decision-making approach fit for the new connected economy and Industry 4.0
• embrace mindset quotients that support people working in a more networked, self-organising, and collective environment

The book is important reading for leaders and managers who are focused on building organisational capital and engagement and gaining value from the emerging technology by evolving their business operating system into a digital ecosystem as part of an ongoing digital transformation strategy. It will also appeal to experts working in the field of organisational change and development, both within the organisation and as consultants.

Part 1_______________________Theory

doi: 10.4324/9781003215561-2

1_______________________Business transformationFrom the old boss to the new BOS

DOI: 10.4324/9781003215561-3

Have you ever stopped to wonder why so many leadership development programmes are full of modules about influencing, motivating, effective decision-making, managing conflict, and the like? It’s because leaders are seen as influencers, motivators, decision-makers, and problem solvers. We are repeatedly told that modern businesses are putting diversity, agility, and collaboration at the heart of their business operation; and yet, here we are in the 2020s and ideas and decisions in large organisations typically follow a classic pyramid approach where key initiatives, ideas, and decisions are formulated by a handful of senior C-suite decision makers who force their ideas down the organisational scalar chain. No wonder Matthew and Gilbert Fairholm opine that ‘the corporation and other large employers may be among the last bastions of a stifling bureaucratic dictatorship defined by chains of dominance and submission’.¹ It reminds me of the story of Walt Disney who sought input from employees through surveys and then sacked them if they didn’t implement the idea in the way he wanted.² This behaviour is beautifully exemplified in a Work Chronicles comic strip (Figure 1.1) reproduced here with permission.

Figure 1.1Brainstorming session.

Source: Work Chronicles.

Unfortunately, this is a common behaviour in most modern workplaces. Despite all the interpersonal awareness programmes leaders have attended, they still seem to manage to create forbidding environments that deter engagement. The problem is, for over 60 years, we have seen leadership development as a fix – that we can somehow reprogramme managers and leaders into being servant leaders. It’s like trying to change the behaviour of a goldfish who is swimming around in circles in a round goldfish bowl; the energy should go into changing the bowl, not changing the fish.³ As someone who has worked for over 25 years in leadership development, I have come to conclude that individuals are not to blame; culture and systems produce this toxic behaviour. Patrick Hoverstadt is right when he says that we are ‘much more puppets of the systems we create than we [are] their masters’.⁴

We don’t need yet another transformational leadership initiative; we need a radical business transformation. We need to fundamentally change and rewire the organisational culture from a business operating system (BOS) that rewards and glorifies monocracy to one that embraces swarmocracy, a swarm-like decision-making culture. We need to connect with the energy and spirit of the Apollo 11 lunar landing and – in a post-Covid world – reinvent our organisations by upgrading the very BOSs that drive them.

Ted Gee defines a BOS as ‘the common structure, principles and practices necessary to drive the entire organization’.⁵ It’s lamentable that over 60 years since NASA was established, many modern organisations still have untenable BOSs. Traditional organisations fool themselves that they foster democratic problem-solving and decision-making and that everyone’s views are considered. The reality is quite different; the modern workplace is a hotbed of cognitive elitism and transactional leadership, masquerading as collective intelligence (CI).

The theme above of individual executives making all the decisions and presuming they know all the answers denotes an alpha leader mentality. Arun Kumar and Nagarajan Meenakshi depict alpha executives as ‘not happy unless they are the ones calling the shots… [and] get stressed when they are not entrusted with important decisions’.⁶ The authors go on to claim that 70% of all senior executives are alpha types. Despite years of transformational leadership journeys, this pervasive culture of alpha decision-making and partisanship is, unfortunately, rife in traditional companies.

Business Operating System 1.0

In most traditional organisations, the BOS follows a sequential and centrally directed formula which promotes rational decision-making. This was modelled by Charles Citreon in 2011 (Figure 1.2). As he explains, the arrows signify the sequence; the rounded boxes are the decision process; and the square boxes are additional parameters.

Figure 1.2Model of the phases of a rational decision-making process.

BOS version 1.0 is a traditional approach for arriving at rational decisions within organisations. It can be characterised as rational based⁷; focused on individualistic choice behaviour⁸; information-led rather than intelligence-led where information is sought to reduce uncertainty and justify the decision-making process⁹; and, as Charles Citreon explains in his commentary, it is typically executed by a high-status decision maker who is perceived to have greater cognitive abilities than everyone else. Such alpha decision makers seek data and information to test their preconfigured ideas and assumptions with the broader community. They do this in the form of a needs analysis/assessment based on shepherded information rather than independent business intelligence.

This classic BOS, or series of decision-making algorithms, has remained unchanged since the last century, despite valiant attempts from the 1970s onwards to move away from transactional to transformational leadership – away from leading through coercion and conditioning to cultivating followership. Companies have poured billions¹⁰ into trying to deradicalise alpha leadership and to promote more open and engaging workplaces and a culture of shared responsibility and decision-making. We have to fess up, as behavioural developmentalists, that this approach has had its problems.

Four factors that reinforce the classic business operating system

1. Culture and conditioning structures

‘That’s the way we’ve always done things round here’ is an oft-heard sentiment in workplaces across the globe.¹¹ We see from the work of Weber through to Skinner and Foucault that the organisational culture and structure can shape and reinforce BOSs and related dissonant behaviours.¹² As I said in my previous book, ‘It simply isn’t enough or effective to mentally reconfigure individual leaders in isolation from the broader ecosystem in which leaders lead’.¹³

2. Alpha leaders are venerated in most organisations

Arun Kumar and Nagarajan Meenakshi, you recall, reported that 70% of all senior executives are alpha types, a statistic researched by Kate Ludeman and Eddie Erlandson.¹⁴ Alpha leaders, mostly recruited from top universities, are still seen as natural leaders and are highly rewarded and esteemed in organisations. The perception of natural strong (heroic) leadership has persisted through the centuries. Two of the nineteenth-century greatest proponents of the superior entitled self were Thomas Carlyle and Friedrich Nietzsche. Thomas Carlyle wrote his ‘Great Man’ theory in 1841 and Friedrich Nietzsche outlined his Übermensch theory in 1883, an independent being who is master unto himself and not influenced by ‘herd morality’. The heroic self and natural leader even found its way into popular culture and the cult of American superherodom that still exists today in blockbuster releases.

3. The industry is still influenced by classical management legacies

The dominant organisational mindset at the start of the twentieth century was classical management theory. These included Frederick Taylor’s 1911 scientific management theory in his The Principles of Scientific Management which formed the genesis of transactional leadership, and Max Weber’s 1944 theories on bureaucracy in Rationalism and Modern Society. The core of classical management theory is centralised decision-making. ‘Centralisation’ is the eighth principle of Henri Fayol’s 14 management principles which Fayol, a French industrialist and contemporary of Max Weber, published in his celebrated 1916 work, Industrial and General Administration. Fayol was of the view that decision-making should be carried out by a concentrated few. This is followed by his ninth principle, the scalar chain, which indicates ‘the chain of superiors ranging from the ultimate authority to the lowest ranks’.¹⁵ Fayol’s apostles include Luther Gulick (1937), Bernard Chester (1939), and Lyndall Urwick (1943). The idea of the concentrated few continued in later studies where the individual decision maker is deemed to be more efficient,¹⁶ spontaneous,¹⁷ creative,¹⁸ and intuitive. We will be exploring some of these issues further in Chapter 3 when we look at individual versus central decision-making in relation to group paralysis, social loafing, polarisation, and groupthink.

4. It is reinforced through leadership development programmes

The way leadership development programmes condition leaders was characterised at the start of this chapter. Such programmes endorse and reinforce the idea of alpha leadership as a single source of influence and power (even though in recent times it has been softened by theories of transformational leadership). Leadership is part of a tenacious succession rite where leaders are identified, nurtured, and promoted by a strong oligarch. They are preselected, assessed for potential, and trialled/tested in the management arena for their leadership qualities which are largely defined by cognitive elitism.

Towards a new Business Operating System (BOS 2.0)

This book calls for a new BOS that departs from linearity and is fit for purpose for Industry 4.0 and the new economy. Figure 1.3 sketches a model that embraces heterogeneity and collective decision-making.

Figure 1.3Business Operating System Version 2.0.

BOS 2.0 is a complex adaptive system (CAS) that makes collective sense of organisational intelligence using agreed criteria and simple algorithms that are processed through interconnected, self-organising, sensemaking networks. Here, collective decisions emerge through collaboration, optimisation, feedback loops, and group consensus or swarm. This dense sentence will be carefully unpacked in this chapter, but a simple headline would proclaim: In BOS 2.0., decision-making as the function of the executive is rigorously challenged.

Contained in this sentence are six principle...

Table of contents

• Cover
• Endorsements Page
• Half-Title Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of illustrations
• List of abbreviations and acronyms
• Preface
• Introduction Small steps and giant leaps
• Part 1 Theory
• Part 2 Application
• Conclusion: Swarm transformation at a glance
• Index