Tuesday, 6 November 2007

Complexity in HCM (sigmoid curves / 2)

One reason I think that the new people management S curve is less rather than more measurement focused is because of the nature of the elements we are dealing with.

Personnel and HR Management have dealt mainly with tangible aspects of people working in organisations – for example, absence / attendance, hard skills etc. The management of these elements depends on fairly clear chains and systems of cause and effect relationships.

Human Capital Management focuses on human capital, for example, leadership capability, engagement, wellness, etc, which are all intangibles. The management of these intangibles will demonstrate the attributes of complexity: cause and effect being distant in time and space.

In the November edition of Harvard Business Review, Thomas Stewart describes these complex circumstances as:
"Where the truth is not immediately evident even to an expert but emerges over time, where cause-and-effect relationships are not well established, where positive results come from offering incentives rather than issuing commands, and where, consequently, the tools of influence and decision making are subtle and ill-defined."

Providing a Leader's Framework for Decision Making, David Snowdon and Mary Bone compare complex to just complicated contexts:
"In a complicated context, at least one right answer exists. In a complex context, right answers can't be ferreted out. It;s like the difference between, say, a Ferrari and the Brazilian rainforest. Ferraris are complicated machines, but an expert mechanic can take one apart and reassemble it without changing a thing. The car is static, and the whole is the sum of its parts. The rainforest, on the other hand, is in constant flux - a species becomes extinct, weather patterns change, an agricultural project reroutes a water source - and the whole is far more than the sum of its parts. This is the realm of 'unknown unknowns', and it is the domain to which much of contemporary business has shifted."

They explain that in a complex environment, leaders must guard against temptations to "fall back into habitual, command-and control mode" and to "look for facts rather than allowing patterns to emerge".

Measurements don't help because "though a complex system may, in retrospect, appear to be ordered an predictable, hindsight does not lead to foresight because the external conditions and systems constantly change".

Instead, leaders must:
  • Probe, sense, respond
  • Create environments and experiments that allow patterns to emerge
  • Increase levels of interaction and communication
  • Use methods that can help generate ideas.