All organizations at some time in their history have experimented, gained knowledge, and operationalized it – experimentation is synonymous with entrepreneurialism. Entrepreneurs test many theories as they launch an idea. They are not afraid of making errors and learning from their mistakes. As they refine ideas and gain more knowledge through experimentation, they eventually reach a stage where they operationalize their model, seek optimizations, and improve efficiency to scale. But for many organizations today, experimentation is dormant or invisible. They have been living in the operational phase of business too long to remember their roots. Their challenge is to resurrect experimentation, acceptance of error, and the curiosity of the entrepreneur.
Many authors have focused on the transition from experimentation to the operational stage. They have characterized the challenge as ‘Crossing the Chasm’ or other titles that convey an avoidance of death. But organizations whose operational models are sputtering or on the outs must overcome years of being operationally focused to restore entrepreneurial experimentation. It is a massive challenge because they must deal with organizational inertia caused by years of successful experiences – experiences that make them believe that their path is best and that they should ignore new signals. They don’t recognize the are dying from inertia till they are beyond treatment.
Organizational inertia results because the more experience an organization has cast into successful operational programs, and the more successful the programs have been, the stronger are the forces which strive to make the organization continue along its current route. Left unaddressed, inertia is exhibited within several negative organizational behaviors including cognitive bias, the suppression of new ideas, and the punishment & fear of failure.
Inertia slows an organization’s ability to respond to change. As Hedberg and Jonsson discuss in “Designing Semi-confusing information Systems for organizations in Changing Environments”, many organizations force the creation of an enormous amount of counter-evidence to convince the organization that they should change course. Not only does it take a threshold amount of counter-evidence to challenge old behaviors, but that threshold increases with success. This is why early indicators of emerging trends appear meaningless to the status quo. These early signals are based on small amount of data that fail to clear the counter-evidence hurdle. As a result, the organization waits till the rest of the world recognizes the new trend (<sarcasm> So much for sensing and responding).
Another problem associated with organizational inertia is that once the counter-evidence threshold is exceeded, you are still not done, it takes further effort to unfreeze old behaviors and replace them with new ones. This results in being glacially slow to adapt – slow to recognize new trends (due to low counter-evidence) and once you do recognize the trend, it requires enormous effort to change behavior. In fact, the organization is probably so slow to adapt that it is miles behind those with early awareness.
Learning organizations succeed by keeping the entrepreneurial mindset alive, and having experimentation continue in concurrence with operational activities. If we want to escape the gravity of our existing operational stage, we must pay attention to resurrecting the entrepreneur in all of us and create the atmosphere required to experiment while we maintain operational effectiveness.
So how do you combat inertia? Do you double your efforts to identify counter-evidence? Do you hire swarms of behavior-changing specialists? I don’t think so. Instead I would address the underlying human beliefs that allow inertia to grow, thrive, and to stagnate progress.
First, recognize that organizational inertia is real, it affects your organization, and that it has a huge impact on responsiveness. Second, be willing to interpret situations in a new way. This includes welcoming new information and being open to many points of view. Third, rather than being certain and overconfident, treat all future actions as hypotheses, with degrees of certainty to be assessed, perspectives to be sought, and experimentation used to gain feedback about assumptions. Treat even the most “certain” actions like hypotheses. This encourages the organization to collaborate and explore many new ideas.
Finally, value every individual’s experimentation and feedback, and let their insights influence new and established mindsets. Their context is important! Encourage the exposure of factors that make an idea unworkable without killing the messenger (even if it is your current recipe for success), and give credence to the smallest signals as part of a hypothesis-based approach to action.
By working to undermine the overconfidence that causes organizational inertia we create an atmosphere to resurrect entrepreneurialism. Organizations need the experimentation, acceptance of error, and the curiosity of the entrepreneur.