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Effects-Based Thinking Part III

Guest post by: James Murphy

Article Overview: In Part I of this series, the concept that everything exists within a system from the perspective of complexity was introduced. In Part II, a three-tiered framework of effects-based thinking (EBT) and planning critical to understanding change in organizations, markets and communities was discussed. In this final installment, discover how effects are planned within complex systems and how adaptive leadership propels those effects.

Effects-Based Thinking Part III

In Part I of this series, I introduced the concept that, from the perspective of complexity, everything exists within a system. In Part II, I outlined a three-tiered framework of effects-based thinking (EBT) and planning that is critical to understanding how change propagates throughout these complex systems - the organizations, markets and communities in which we all live and work. In this final installment, I will explore how effects are planned and initiated within complex systems and how cognitive, adaptive leadership propels those effects. Effects-based thinking transmits through systems in three orders - kinetic, second and third order effects. Kinetic effects describe the objectives of short-range operational plans - the plans and projects we carry out on a daily basis in our work. These objectives must be clear, measurable, and achievable and must support the organization's overall objectives. Although a plan or project may take some time to complete, its effects should be immediately observable and measurable. That's the kinetic effect of effects-based thinking - a small but significant step toward a larger goal (i.e. second and third order effects).

But, the kinetic effects we seek to create must have another quality. That quality is what we call "line-of-sight alignment" or "adaptive leadership." Adaptive leadership is a clear understanding of the actions that need to be taken now to affect change over the long term and achieve the effects desired at the third order of effects-based thinking. It's simply understanding how what you do today most likely affects the future. It's a clear line of connection between kinetic, second and third order effects - or daily operations, strategy and organizational mission and vision. Examples of adaptive leadership are thinking about the fact that the customer service I provide today affects the store's bottom line at the end of the month and supports the long term success of the business and considering that the investment I make in the new leadership development program today will stem the outflow of experience from the retiring Baby Boomer generation over the next few years, and will build a firm foundation for long-term growth and success. With effects-based thinking, we are well-equipped to make the daily, weekly and monthly actions necessary to get these results. Adaptive leadership also helps develop a more keen perception of the system as a whole.

iPods, Assassination, and EBT

The intended impact of adaptive leadership and multiple planned kinetic effects ultimately generates second order effects within the larger organizational units. It is even possible that a single, timely, kinetic effect can directly cause third order effects. But for that to occur, the larger system would have to be in a critical and highly sensitive state. Complexity scientists refer to such a state as self-organized criticality. Consider the assassination of Archduke Ferdinand in 1914 and the introduction of the Apple iPod in 2001 as examples of effects-based thinking and complexity. An anarchist assassinated Archduke Ferdinand in August of 1914 which precipitated the First World War - true in a way, but that's a misunderstanding of the complex system that existed in Europe nearly a hundred years ago. A complex array of treaties and political relationships existed in a critical state. War was virtually inevitable - it only needed a small push. Another good example of complex relationships and adaptive leadership that helps us understand effects-based thinking is the consideration of the music industry. The music industry existed in a similar critical state in 2000 with technology and downloadable music threatening intellectual property rights and profits of major entertainment corporations. Into that system stepped Apple, who launched one of the most successful products in history. The iPod's success was due in part to the criticality of the system and Apple's adaptive leadership and decision to seize the opportunity inherent in that instability. For businesses, sensing such critical states is the essence of recognizing opportunity - an opportunity that is clearer to those possessing effects-based thinking and adaptive leadership.

All activity in a social organization takes place through individual actions or it is carried out by processes designed and implemented through individual actions. People originate action and therefore create effects. Take a moment and think about what it means. A corporation is a legal entity much like a person. However, regardless of the legal status of a corporation, it does not think and act as an individual - a corporation does not have the anima for effects-based thinking or the capability for developing an adaptive leadership strategy. It takes no action except through the actions of individuals. That individual may be the owner, the CEO, or the chairman of the board, but nothing actually occurs, there are no impacts or kinetic effects except through the actions of individuals. A company does not purchase raw materials. A purchasing agent purchases those raw materials either through their own decision-making process or via an inter-organizational process. A company does not merge with another except through the legal transaction committed by an officer so empowered to execute that transaction. The individual person and his / her capacity for effects-based thinking, adaptive leadership, and physical action is where the rubber meets the road in social systems.

For example, if the vision or goal of a retail chain is to capture the largest segment of its market, then it is not the regional manager that sells the product. It's not the district manager that builds a new store. It's not the store general manager that stocks the shelves. It's the sales rep that sells the camera to the customer. It's the contractor that pours the concrete. It's the store associate that stocks the green beans. The third order effects desired by the organization upon the larger market system must be translated in a cascading fashion from the very top of the organization to simple actionable tasks at the individual level. It does this through clear, adaptive leadership in the context of effects-based thinking.

Summary

We utilize the word "thinking" in effects-based thinking for one very important reason. Although the concept finds its roots in military operations, and is known as 'effects-based operations' in military circles, the application is much more broad, and perhaps more important in non-military settings. We call it 'effects-based thinking' because of the absolute necessity for human thought processes and adaptive leadership to cut through the muddy waters of complexity. Effects-based thinking, at every level in an organization from the CEO to the 'Strategic Corporal' must ultimately rely on well-informed judgment to guide right action. Technology can only provide more information. It cannot provide meaning and it can't decide anything.

Humans are made to think and decide - to choose. But, how we do that, well or poorly, is dependent on many factors. Those factors vary from one individual case to another. And, when combined in group planning, those individual factors multiply and create greater challenges to orchestrating planning and decision making as a group - and are further magnified when we must coordinate such planning and decision making at the organizational level. How do we comprehend all the complexity around us and within our organization in order to plan for and foster adaptive leadership? How do we coordinate all that activity? How do we know our plans are effective? How do we manage all this in an ever-changing environment? Effects-based thinking and adaptive leadership give us the first cognitive tool to deal with these daunting challenges.

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Article Tags: adaptive leadership, effectsbased thinking



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