Being a human organisation (part 5): Grasp the context

Welcome to part five of this nine-part series on how to be a more human organisation. In previous articles, we’ve looked at how Human Organisations understand people and our social nature, the need for a shared purpose, and the value of defining what you believe. Now, let’s examine the power of grasping context.

“The most important thing I’ve learned since becoming CEO is context.
It’s how your company fits in with the world and how you respond to it.”
Jeff Immelt, former Chairman and CEO, General Electric

Or, to put it another way: if you’re sailing a ship, you’d better understand the weather.

Your wake-up call

We’ve learned from the global financial crisis of 2007/8 and the COVID-19 pandemic, that unforeseen events can throw strategies up in the air. As the Scots poet Robert Burns wrote: “The best laid schemes o’ mice an’ men gang aft agley (often go wrong)”.

Experience tells us that change is continuous, change can be dramatic, change is often beyond our ability to control, and change is often unpredictable. We know that shifting context will impact risk and opportunity, so context should be continuously on the radar of every board and executive team.

If it isn’t, how much more of a wake-up call do you need than a global financial crisis, a global pandemic and a climate emergency? And yet, how smart are we at reviewing context?

As this quote shows, a seat on the board doesn’t grant infallible powers of prediction…

“There’s no chance the iPhone is going to get any significant
market share. No chance.”
Steve Ballmer, former CEO of Microsoft (quoted in 2007)

What we know

In his 2016 book Superforecasting, political science writer Philip Tetlock said: “There is no evidence that geopolitical or economic forecasters can predict anything ten years out.” Yet, I would argue that we’ve never had more information at our disposal to help us understand the world we live in.

We know about technological change. We know about population change. We know about different cultures (there’s even an online ethnographic atlas of over 1,200 societies). We know we’ll be hit by even more extreme weather events. We know about the impact of unforeseen extreme economic events. We know about the probability of more zoonotic pandemics. We know about the potential movement of hundreds of millions of climate refugees across the planet as they are forced to move by seawater rises, fires, air pollution and storms.

And we know that all of this will affect our employees, our customers, our communities and our organisations. It will affect our plans, our products and services, our behaviours, our profits, and our competitors.

How we react

Organisations that are ready for continuous change will do three things.

Firstly, they get organised. They should have an in-house team with responsibility for continually reviewing context (beyond risk and governance). They should also have a Context Advisory Team (or CAT) of external reviewers continually updating context and probabilities.

Secondly, they understand that there are different types of future:

• The probable future if nothing changes, based on signals that we can see happening today.
• Several possible futures based on these signals that people can imagine (because bringing these futures to life makes it easier for people to see, hear and feel the future).
• The preferred future, which defines the kind of future we want to happen.

Thirdly, their understanding of context is continually updated, not simply in advance of the next strategy review. And they have an emergency playbook for a process in the event of unforeseen storms.

“If the rate of change on the outside exceeds the
rate of change on the inside, the end is near.”
Jack Welch, former CEO, General Electric

A context checklist

To check how ready you are for the future, just answer true or false to these statements. You want a lot more true than false.

 

How did you do? The bottom line is: if we don’t understand the weather, the ship can run aground.

Let’s talk

As discussed above, this is part five of a blog series on the characteristics of the human organisation. While you wait for the next instalment, read all nine by downloading our report: The Human Organisation

And if you want a chat about how to make your organisation more human, and how to future-proof your business, drop me a line at John.Drummond@CorporateCulture.co.uk