Organisational Wisdom

More than 50% of business decisions end in tears , some more spectacularly than others! In today's VUCA world (volatile uncertain,  complex, and ambiguous) business leaders are under pressure to act quickly and make the "right" call. So how do they get it so wrong so often, and how can you beat the odds? In the early 1970s, Ford Motor Company's charismatic CEO, Lee Iococca wanted a "2,000 pound car for $2,000". The result was the Ford Pinto, a popular compact car designed to beat the Japanese automakers at their own game. But there was a problem. The position of the gas tank meant a rear-end collision could easily rupture the tank and cause a fire. Engineers came up with a fix but it was going to cost about $11 per vehicle, which would amount to $137 million over projected sales of 12.5 million vehicles. Instead, Ford conducted a cost-benefit analysis on the litig ation costs due to likely deaths and severe burns of drivers and passengers and arrived a...

Herding cats is easy compared to keeping a bunch of smart millennials motivated for long enough to make a meaningful contribution. Yet, fast-growing, agile, entrepreneurial organisations need this kind of sustainable energy to do good things for clients and communities. What's the secret?  It turns out this is exactly the same problem faced by professional service firms - the McKinseys, Deloittes, and BCGs of the business world. They have to entice a group of disparate professionals to give up autonomy in return for a group share of the profits, while at the same time maintaining the bonds of a matrix-structured organization which threatens to fly apart at any moment under the centrifugal force of massive ego! Have they cracked the code?  Laura Empson, Professor in Management at the Cass Business School, London, and Ann Langley, Professor of Management at HEC Montreal think they have. Their model of the professional service firm (2015) is an elegant guide in how t...

Artificial Intelligence is already here, we just don't notice it yet. All around us, the invisible algorithms of social media and countless online platforms are shaping our buying habits, our values, and our beliefs. Should we be concerned? The Power of The Algorithms The algorithms exploit our cognitive baises and effectively hijack our minds without us even realizing it: Our devices have the same conditioning effect as poker machines, keeping us hooked on content through Intermittent variable rewards . FOMO (Fear of Missing Out) becomes an addiction to living moment to moment online. Our social approval is primed by how many tags and likes we get.  Our need to reciprocate social gestures is exploited to keep us on the platform for longer (looking at you LinkedIn). Automatic feeds and autoplay are like consuming a bottomless bowl of soup - we will always consume more than we need. Message interruptions are an effective way of capturing our attention since we're p...

The Hayne Royal Commission in Australia has upended the central myth of the financial services sector that "greed is good". As if we learned nothing from Gordon Gecko, the central character portrayed by Michael Douglas in the 1987 movie "Wall Street", and by Stanley Weiser in the 2010 sequel. The script is too real to be entertaining any more. The Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was released this week, and it presents an eye-watering litany of misdeeds, misappropriations, mismanagement, and missed opportunities for reform. Both business and government leaders appear to have been sitting on their hands while customers were routinely fleeced of their money. How did this become so seemingly normal? Cognitive Bias In 2010, German researchers found strong evidence that cognitive bias most likely contributed to the decision making which led to the global financial crisis of 20...