the business of construction, deconstruction and reconstruction

 

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“The only certain thing about the future is that it will surprise even those who have seen furthest into it.”

Eric Hobsbawm

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“Too many people spend too much time trying to perfect something before they actually do it. Instead of waiting for perfection, run with what you’ve got, and fix it along the way. “

Paul Arden

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“Chance favors the connected mind.”

Steven Johnson

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• Preface:

This piece, first published a dozen years ago, was when I put a stake in the ground that (a) the old way of doing business was no longer the most useful – to business as well as to the way younger generations would be most effective, and (b) younger people had different, some better, skills than the existing business generation. In many ways I became an advocate for young business people, and young people in general in education, use of technology & purposeful work, but maybe more importantly this established my stance on what needed to be changed systematically. I do not believe we have resolved this issue and the conflict remains in almost every discussion in how we evaluate how ‘young people’ are not like “what worked for us.”

Please note that in some places I have inserted links to things I have written building on this thinking.

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Let me state the obvious. The business world is changing. How we think, what we think, the business models to implement the new thinking.  This has created an arduous back and forth conflict between the way it was done versus the way it will be.

Overall, one of the biggest challenges the business world is facing is that the entire approach to thinking about how to conduct business is changing which ultimately means the biggest challenge is not the new model itself, it is the fact that the current leadership management thinks one way and emerging management generation of thinkers thinks another. This creates issues not only in how the generations interact in the workplace, but also impacts the effectiveness, or ineffectiveness, in training the emerging management employees to be successful.

Regardless. I call the change: ‘construction thinking’ to ‘deconstruction thinking’ <or “reconstruction thinking”>.

Here is where we are today.

• The existing business world view

The traditional business world <and existing management way of thinking> is based on a construction thinking model. Think of this as Lego blocks.

You were given <taught> all the Lego building blocks one by one and taught <trained> the different ways to use them and build something solid from the ground up. Doesn’t really take into consideration what TopModels suggest are the black boxes of thinking <see later in ‘Deconstruction Thinking’>, the Lego blocks you need to insert based on faith <or intuition>, which invariably we always use <but don’t – can’t – train for>. This was a “build and implement” philosophy.

To be clear. Business thinking is always about balancing real knowledge, faith knowledge and intuition. But in traditional thinking we tend to make the formula weighted toward real knowledge and construct solutions aiming toward a cause and effect <stimulus response> relationship. Business training still seems to continue to serve up this linear cause-and-effect thinking as if, by doing so, we’ll understand the person, predict behavior and results and be able to make sense of everything we do if not ‘control’ the outcomes we desire.

An unfortunate truth? Causing effect is not linear. Never was. Never will be. And this is true even more so in today’s more fragmented stimulus dynamic marketplace.

What you share as an initial stimulus is so often repurposed in ways you cannot even envision and it inevitably creates multiple effects – sometimes derivatives of the desired effect and more often an un-envisioned effect. The reality of business is that it is constantly working toward coherence and breakdown – simultaneously. It is the continuing conflict of micro-actions (what a business does) in conflict with the macro-dynamics of the marketplace (and people) itself.

The reality is that the future success of a strategy is almost impossible to predict and we then have to lean in on ‘probabilistic thinking.’ In addition. This also means that Big Ideas <in general> are useless <and not worth the effort to try and construct>.  In today’s consumer business marketplace, it simply pays to do more things, try more things and simply give yourself more chances that at least one idea takes off now and you have other ideas which could take off ‘then.’

Note: I’ve been saying for a long time the big idea is crap (2010)

Suffice it to say big ideas will largely be replaced by ideas many of which will take on a life of their own.  Or maybe the business seeks an initial idea that sparks interaction and thought and action/behavior and a business adapts to the resulting behavior. The business, and the idea, is ultimately defined by what happens next. To reiterate an earlier thought, a business is defined by coherence and breakdown. All of these ideas I am suggesting remain coherent to the business objectives and business vision, but ‘coherence’ permits some space for some of the ideas to ‘breakdown.’

That said. It isn’t just ideas, while the world isn’t stagnant or linear, thinking is exactly the same.

It’s constantly evolving and alive and fragmented into beautifully imperfect shapes and sizes.

The problem with a static brand proposition and a static strategy – or anything static other than a vision or character statement – is that the business landscape, brands and their competition, are anything but static. Business, like people, are evolving entities that live and die by the success of their actions.

Basically, construction is based on predicting behavior before implementation.

• The new business landscape

Simplistically the old way is to methodically construct solutions and ideas and then commit.

The new way is more about committing <smartly> and then deconstructing as information is received and adapting (reconstructing) until it reaches a shape that could be sustainable.

Interestingly, it is actually an older leader who embraced the new way:

<Napoleon>: “On s’engage, et puis – on voit.” <you commit yourself, and then – you see.>

The traditional business cycle has always been one of “study, act, study.” Information precedes decisions then the impact of decisions is assessed before the next decisions are made. Each step of the way information, or learning, is the gate through which decisions must pass.

That much has not changed.

Well. Maybe with the rise of digital technologies & the internet the cycle times between the ‘act’ and the ‘study’ has been compressed. The old starting point of “study” has become a luxury few marketers can indulge. The new technology cycle is one of “act and react.” “Act” not “study” is now the point on which everything else pivots. It becomes ‘actively learning on the go.’ The new ‘bargain’ a business makes is found in interaction and connectivity which is inherently an intellectual process with the objective of productivity. The reality is calculating a utility effect is almost impossible therefore utility must constantly be assessed. This means the new landscape is based on answers/input needed in real time. It also means getting into the market is not based on ‘perfecting before going,’ but rather “good enough” is, well, good enough. Businesses learn on the go, testing alternatives by doing not by asking, in the marketplace. The core of how a business operates is now more on how consumers behave than on what they think.

To be clear. This new landscape is only empowered by technology; it is the people, the emerging management generation, who are really driving the new business thinking model.  This new generation of management has some specific features which benefit the new business landscape:

• Knowledge <or information> is available to anyone with access to a computer
• There are an increasing amount of things which are ‘black boxes’ of inner workings <they work but the majority of us have no clue how they work> which compress thinking & doing time
• Great decision making in today’s business world is more often defined by on how good you are at assessing what aspects should be accepted on habitual/replicable working knowledge and what aspects need new knowledge & understanding
• It has never been possible to know everything, but in today’s world it is mind numbingly <and humbling so> obvious and it has become more accepted to learn on the go
• Curiosity is not just a business characteristic but also a management tool <an openly curious leader embraces team dialogue & discussion – without relinquishing decision responsibilities>.

All these things tend to make me believe we are within a great transformation in business thinking.

Unfortunately, to the existing business world & existing senior management, this transformation is being led by the next generation. A generation also characterized by:

• One more comfortable utilizing what is called ‘black box knowledge’ and driven by instinct <but willing to adapt from learnings if instinct proven wrong>.
• One where no part of a business, or department, is out of bounds.
• One where creativity in thinking and intuition are used to imagine the future.
• One where value is in information and not things.
• One where value is found in experiences/doing <real knowledge not speculated knowledge>.
• One where value is found more in unfolding discovery and new opportunities rather than researched discovery.
• One where expectations are in the back seat and possibilities are in the front seat.
• One where every company is in the information business first and foremost.
• One where value has migrated from tangible to intangibles.

The clashing of generational business thinking can almost be summed up by Douglas Adams:

And while I believe this is the new business thinking world model,  the ‘deconstruction business world,’ it inherently contains an aspect which makes the younger generation thinking engine go.

Which leads me deconstruction <or black box> thinking theory.

This is how I believe the next generation of business leaders, those who grew up in a more technology-driven age will think and manage and make decisions.

We are increasingly surrounded by ‘black boxes.’ These are complex constructs that we do not understand even if they are explained to us. We cannot comprehend the inner processes of a ‘black box,’ but nonetheless we integrate their inputs and outputs into our decision-making <just think of your computer as the everyday black box we trust>. In a weird way, this is the younger generation’s version of ‘rational and habitual’ decision-making. Older generations have tucked away things they don’t think about – maybe call it heuristic thinking. Younger generations tuck some of these black boxes into their thinking. The largest difference here is that older generations rarely second guess their habitual thoughts while younger generations constantly revisit the ‘black boxes’, which iteratively update themselves, to check in on assumptive thinking.

Anyway. A quick note on black box thinking or “why faith is replacing knowledge”:

“… our world is getting more complicated all the time. Black and white, good and bad, right and wrong have been replaced with complicated constructs that leave most people in the dark.

As the world around us becomes increasingly fast paced and complex, the amount we REALLY know – what we can really grasp and understands – decreases all the time. Today it is more or less taken for granted that we do not understand many of the things that surround us, such as mobile phones and ipads. And even if somebody tried to explain the DNA code to us, we would probably be out of our depth. We are increasingly surrounded by ‘black boxes’ … complex constructs that we do not understand even if they are explained to us. We cannot comprehend the inner processes of a black box but nonetheless we integrate their inputs and outputs into our decision making. The amount that we simply HAVE to believe, without understanding it, is increasing all the time. As a result we are tending to assign more importance to those who can explain something than to their actual explanation.”

The Decision book: 50 models for strategic thinking – Krogerus & Tschappeler

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The new decision making world, one driven by technology and that ‘black box’ of knowledge computers offer in terms of knowledge, is ultimately a deconstructive thinking world. A world in which it is understood that a stimulus can create desired, and sometimes undesired, responses and success is often more based on reacting & adapting to an initial stimulus than perfecting the initial stimulus.

Going back to the Legos analogy, deconstruction/reconstruction identifies the tangible Legos as well as the intangible ‘black box’ Legos.

• Were they used appropriately?
• The appropriate mix?
• The appropriate place?
• Could a real Lego have been put in place of a black box Lego and I would have been better?

And over time some of the black box thinking (the intangible and vague ‘knowing’) becomes more tangible as well as we gain more faith in certain black box thinking application (habitual replicable thinking) while other aspects remain in question (and ongoing evaluation).

Now.

Some people may call deconstruction thinking/solutioning <because they say the deconstruction term is too negative> is simply a more contextual approach to thinking <and learning>. At its core they would be correct – a contextual approach recognizes that learning is a complex and multifaceted process that goes far beyond drill-oriented, stimulus and response methodologies.

According to contextual learning theory learning occurs best when people process new information or knowledge in such a way that it makes sense to them in their own frames of reference <their own inner worlds of memory, experience, and response>. This theory assumes that the mind naturally seeks meaning in context that is in relation to the person’s current environment and that it does so by searching for relationships that make sense and appear useful.

I may suggest this is adaptive thinking <a term I made up>. Stanford calls it “adaptive strategy”:

Adaptive strategy. We create a roadmap of the terrain that lies before an organization and develop a set of navigational tools, realizing that there will be many different options for reaching the destination. If necessary, the destination itself may shift based on what we learn along the way.

Creating strategies that are truly adaptive requires that we give up on many long-held assumptions. As the complexity of our physical and social systems make the world more unpredictable, we have to abandon our focus on predictions and shift into rapid prototyping and experimentation so that we learn quickly about what actually works. With data now ubiquitous, we have to give up our claim to expertise in data collection and move into pattern recognition so that we know what data is worth our attention. We also know that simple directives from the top are frequently neither necessary nor helpful. We instead find ways to delegate authority, get information directly from the front lines, and make decisions based on a real-time understanding of what’s happening on the ground. Instead of the old approach of “making a plan and sticking to it,” which led to centralized strategic planning around fixed time horizons, we believe in “setting a direction and testing to it,” treating the whole organization as a team that is experimenting its way to success.

And that is what the new technology driven generation of business people will inevitably do.

They will confidently use black boxes more faithfully as well as seek relationships that make sense and appear useful – and adapt.

They will be driven more by looking at solutions and not saying ‘why does this make sense?” logic understanding, but rather ‘this doesn’t look right <or it looks right>’ logic understanding.

This will translate into an adapting mentality on everything. And, yes, I mean everything. Not just tactics and execution, but strategy and sometimes some things which in the past have been considered inviolate with regard to change <like the archaic 5-year plan>. Inevitably this increases business agility or what Alvin Toffler suggested in The Adaptive Corporation.

I’d like to just add that black box thinking is not a new thing <but has ALWAYS made us feel uncomfortable>. Albert Einstein received a Nobel Prize for recognizing that models and ‘logical’ systems are ultimately a matter of faith. And, yet, it is often difficult to let go of the tangible or ‘proof prior to acting’ model. It is basic human nature to often believe so strongly in models that they take on the status of reality. But reality, in terms of business thinking and models, is often not reality – and unimaginable can become reality.

Unimaginable is difficult in today’s business world because nowadays almost everything we do leaves behind some trace therefore companies can monitor how their business is running, where customers are, what they are doing and how they are doing it. And in knowing these things they know the nuances of what makes, or breaks down, a business as well as what makes, or breaks, coherence. Well. That theory works, until it doesn’t.

Practically speaking future decision makers will tend to work with probabilistic tools rather than with predictive models. That doesn’t mean the formulas & models will all be thrown away instead the formulas and models that try and predictively define iterative behavior are in ‘black boxes’ which should be viewed with some skeptical ‘faith’ and an understanding reality occurs in test and measure and watched behavior and attitudes all refined with real data <reactive actions>.

That, my friends, is black box thinking in a nutshell.

To be clear. Models will not be discarded.

In an increasingly confusing and chaotic and black box world the models provide some order and assist in providing focus on what is important and to believe in what we see.  Models will be used to ‘frame’ situations and choicemaking. That said, I believe the ‘building models’ will be relegated to a lower priority <therefore we can invest less time and rigor> and instead we will more often assess by understanding what doesn’t look right rather than developing something with the intent of building it to look right.

I believe this is the new operating business thinking model.

I also believe, as stated initially, this will be a painful arduous transition

Companies with managers who manage and think like this <mostly the younger emerging managers> will look like frickin’ aliens to many of the existing companies with older ‘model first thinkers.’

I imagine my real point here is that there are companies with young employees who embrace black box thinking who can help those companies be better and do better, but those companies are still solidly stuck in old school logical ‘rationalize before its done’ attitude.

• The future

Here’s the good news for black box companies: the business world is coming to them. Not today, but certainly tomorrow. And while we may try and make the transition move faster – we cannot.  Most good companies will knock themselves out trying to deconstruct a black box into some logical explained system or thing. But a black box is, well, a black box. It isn’t meant, and it really cannot, be explained in any way that an older manager who doesn’t trust or like black boxes can ever be explained.

Trying to do so defeats the real value of the black box.

This is like discussing business apples and oranges.

There is an entire tier of existing business leaders and managers that are baffled by black boxes.

Maybe worse? They don’t trust black boxes?

Maybe even worse? They don’t embrace deconstruction business thinking. Every bone in their body is driven toward constructing optimal solutions from day one.

Once again, to be clear, younger people don’t ‘trust’ black boxes, they simply use them as lily pads for progress and revisit the boxes all the time to assess where the next lily pad may reside.

Here is the interesting dilemma.

Older existing management would actually be quite capable, and most likely, quite good at deconstruction thinking. Most good experienced business people instinctually ‘see’ lily pads as they arise.

The problem is ‘lily pad hunting’ makes them uncomfortable. Uncomfortable in that it wasn’t the way they were taught & trained – they were trained to build bridges – and believe a younger generation shouldn’t make the ‘leap’ to deconstructive thinking without having learned the constructive principles.

What a bunch of bullhockey.

Training needs to adapt to the thinking and thinking capabilities <some would call that technology> rather than adapt the new business thinking models to archaic training/thinking models. We need to be actively teaching principles reflectively which means incorporating a strong teaching principle of embedding knowledge within context.

The gap between construction and deconstruction is so far apart philosophically it is crazy to try and bridge it. Of course business thinking is always about balancing real knowledge, black box knowledge and intuition. It has always. The ‘formula’ is simply different now. We need to adapt training to accommodate the new formula.

Which leads me to people specifically the emerging managers <next generation of managers>.

Emerging managers in a company will go nuts <for a while>. Emerging managers instinctually think about deconstruction thinking methodology and get excited and think “let’s go … let’s do it” only to have their more methodical front loading leaders say “whoa … slow down … lets be sure we get it right from the beginning.”

Look. I’m <and I imagine any good deconstruction thinking type company> not opposed to getting it right straight out of the box, i.e., having things as perfect and researched and nuanced as possible when you introduce it. But if you invest too much time trying to get it right the market has passed you by.

I’d rather be ‘close to being right’ in the beginning and adapt quickly as it enters the market.

Well. That last sentence will send older leaders into convulsions.

Which leads me to meeting the construction versus deconstruction gap.

Let me be clear about ‘black boxes.’ We still need people. For all the black boxes, the stealing of sound, sight, smell through data, and all the satellites and technological widgets of intelligence gathering, it still boils down to humans in the end. No matter how advanced the technology it is people who have to make the final assessments. People who can give access to the minds and ‘future thinking’ of those who we are trying to gain insight into.

Black box intelligence still needs people.

Past experience, benchmarking, good to great skill management and construction thinking isn’t enough to be successful in the new business landscape, but it is still incredibly useful. Deconstruction thinking is a complex combination of effectively using quickly assembled solid building blocks and implementing only to deconstruct <and reassemble> on the move. The military would suggest it is adapting the battle as you engage.

I suggest that in order to weave your way through business issues, organizational issues, people issues and real knowledge issues takes a daunting combination of strength of character, curiosity, strength of self and real leadership <of which confidence … not arrogance is embraced>. Deconstruction is not for the faint of heart. Nor is this type of thinking conducive, nor easily compatible, to the existing style of traditional management thinking.

But.

I believe it is the future model of business thinking and operating.

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“… find ways to delegate authority, get information directly from the front lines, and make decisions based on a real-time understanding of what’s happening on the ground. Instead of the old approach of “making a plan and sticking to it,” which led to centralized strategic planning around fixed time horizons, we believe in “setting a direction and testing to it,” treating the whole organization as a team that is experimenting its way to success.”

Stanford

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Which leads me to the actual structure & operations of businesses.

First. I tend to believe everyone in business understands that the traditional structural organization is changing. And it is doing so painfully and expensively <at a cost>.

The change is most typically associated with the transformation associated with infrastructure and technology, but I would argue it is more about people than ‘things’ (technology).

Second. This organizational structural change is tied to the wrong thing. Currently it is being tied to changes as dictated by technology and it SHOULD be tied to thinking construct (or what I have called “the conceptual age”).

The good news is that regardless of the reason the change will be a long arduous shift in the business world as part of a long transition in how business thinks about itself and the best model for conducting a successful business. The bad news is that the businesses that do not adapt are unlikely to survive in the longer term. This comes down to one basic thought as I discuss the new business model for businesses – however great the costs of this construct change the costs of not changing is much higher.

Anyway. I described this new business model and thinking back in august 2010 as a more agile organization culture, controlled autonomy, the company has an ability to blend into the marketplace <versus rigid institutions unable to flex>. Today’s more rigid ‘construction model’ is already outdated. And even by ‘updating’ thru accommodating technology what is being built is more a Frankenstein <let’s insert new thinking & new technology within existing company model> rather than a concept built from scratch <and having a plan of how we ‘get from here to there’>.

The future deconstruction model, let’s say it’s a hybrid of a ‘controlled autonomy’ model, is being built in ‘fits & starts’ in today’s business world.

To be clear. In my eyes the new model incorporates both autonomy & control, therefore, is not a flat organization nor is it purely ‘instinctually based’. Autonomy in any organization is a combination of control <as in guidelines, principles and behaviors> and trust <in that people are intrinsically interested in making a contribution and learning>. This more agile organization essentially believes, and trusts, employees want to do well and to do good things therefore incorporating a strong value/integrity base into the everyday behavioral attitude. By the way, this freaks out an older management generation <who tend to believe everyone is out for themselves and throughout their business lives have fostered a ‘kill or be killed’ mentality>.

But the smarter more adaptable management have used this ‘ethical core’ philosophy as a way to move from input-driven work models to structures which focus more on evaluating outcomes and acting upon outcomes.

This shift in reflects an organization culture driven by rules to being driven by guiding principles.

Inevitably this permits more autonomy, better strategic tactics and more fluid responses to customer input without compromising the culture of the business or the vision. This Deconstruction Business Model is more of a porous business model. It is free thinking, adaptable <constantly shifting resources toward opportunities and away from non-opportunities>, emergent, diverse & interpretive based where the organizational actions rhythm is created by external stimuli … not internally.

Conversely a Construction Business Model is all about the system.

All about rigid systems with space built within for ‘innovation and flexibility.’ In actuality in today’s world the systems cramp and are confined <or confining>. The construction model dictates the organizational rhythm and hopes it can match the behavior patterns of the outside world. In effect a Construction Model was developed with the intent for ‘predictability’ with the overall approach intended to stabilize demand and make it more predictable. Internally it focused on ensuring managers at all levels had enough information to manage their part of the business. It is basically a centralized administration/management and decentralized operations where the ‘center’ measures, monitors and directs. Most companies still do this <albeit they argue they have ‘empowered the customer face units’>.

What makes the Construction Model even worse for agility & adaptability is that the Center maintains the setting and control of budgets and ultimately measures performance against this. If the market, and the world, were stable and reasonably predictable this could <notice I say ‘could’ > work but with unstable and often shifting markets <increasing & decreasing quickly> this model is not only inefficient, it is ineffective.

On the other hand.

The Deconstruction Model is all about the people and utilizing their minds and reactive attitude <regardless of their particular skills>. This means the Deconstruction Model is naturally adaptive as it is more built upon ‘see & do’ <I see information and respond this way>.

The conflict between these two extremely disparate models is in process.

Pretty much all existing successful businesses with any heritage <company Life> face deep challenges because of this conflict. And most businesses are not handling the conflict well. They are being reconstructed with technology, and technology attributes, driving the reconstruction. In other words the ‘system’ hasn’t changed, but the tools within are being updated.

This is ass backwards.

The model should be constructed with the people and necessary thinking in mind and THEN offer the tools necessary to make that organization successful.

The Deconstruction business Model is driven by its people where the employees guide the strategic choices or the tactical strategy rather than strategic tactics that need to be made in real time.

This premise also drives older management crazy.

How can something be effective without strategy first and foremost?

Well. Research certainly suggests if you were to choose between organizational culture and ‘strategy’ with ‘creating a productive and profitable organization,’, organizational culture is significantly more effective than any strategy. This does not mean strategy is not important just that a learning organization is more effective than a simple execution organization.

This bears out even more so in turbulent business environments.

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Businesses with engaged workforces outperform those without by a significant margin. And when employees are enabled and energized, as well as engaged, profit margins are three times as high as those of companies with low levels of engagement.

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To conclude.

My thinking on new business models thinking represents a fairly significant disruption to the way most businesses operate, and think about thinking, today.

I imagine it feels even more disruptive because so many older business people are hoping business goes ‘back to the way it was’ <or some version of it> in terms of economic conditions <believing once economic conditions improve habits will return to old ways of doing & buying things>.

This misses the real issue in that the base business model is changing – changing to meet the strengths and ways of conducting business & Life of a new young generation as well as an increasingly dynamic marketplace.