The final post in this three-part series explains how organizations can consciously shift boundaries as their environment changes. Click on these links if you are interested in the first two posts on the importance of boundaries in an increasingly complex world and three key boundaries an organization must define from a systems perspective.
How Do You Evolve Organizational Boundaries?
The rapid pace of change in the world requires that organizations create boundaries that are permeable. While some organizational characteristics such as values might need to remain firm, and some such as core competencies and brand might need to shift only gradually, many others such as products and services will need to evolve more quickly as the organization’s environment changes. Since we tend to solidify or institutionalize boundaries if they appear to serve us, it is important to learn to deliberately relax boundaries that have become too rigid or outdated.
Here are three strategies you can use to modify existing boundaries:
1) Deepen your insight into what is happening now:
- Refrain from jumping to solutions to problems you do not fully understand. Because systems exhibit strong tendencies towards equilibrium – the principle of Compensating Feedback referred to in my last post – most solutions that work in the short run tend to either be neutralized or actually reduce performance worse over time. One way to ensure that you do not “reinvent a broken wheel” is to fully explore “Why does this problem exist?” well before considering “How can you solve it?”
- Surface and test your beliefs and assumptions on an ongoing basis. Techniques for holding productive conversations around difficult issues – such as the Ladder of Inference, Balancing Advocacy and Inquiry, and dialogue – help people reflect on their thinking and free them to evolve it in favor of what they want to accomplish.
- Revisit your intention. Edward Deming pointed out that a system is perfectly designed to accomplish what it is accomplishing right now, which is another way of saying that it seeks stability or equilibrium. In other words, there are always payoffs to the status quo no matter how dysfunctional it appears. If you want to steer the system in a new direction, you must not only articulate the case for change but also understand the case for the status quo – the benefits of not changing and the costs of change. Only when you have weighed the tradeoffs between the two can you make a conscious choice in favor of change.
2) Broaden existing boundaries:
- Engage with a wider group of organizational stakeholders. The wider group of stakeholders can include both other organizational units and external parties such as customers, suppliers, partners from both your own sector and others than your own (e.g. nonprofits and government if you are in the private sector), and experts.
- Learn how your actions impact stakeholders in both intended and unintentional ways.
- Create slack organizational resources (or bench strength) to increase your flexibility in the face of uncertainty.
3) Lengthen your planning horizon
- Distinguish the intended short-term vs. often unintended long-term consequences of your actions. As noted executive consultant Ram Charan counsels CEO’s, decision-making in today’s complex and uncertain world requires “thinking through as many second and third-order effects as you can.”
- Distinguish small successes – improvements now that deliberately build towards a longer term result – from quick fixes – reactive solutions that do not take long-term consequences into account.
- Anticipate the limits to your current engine of growth and invest to overcome these limits before they present serious problems.
Not only do organizations fix some boundaries too firmly, they also unwittingly relax others too freely, which creates confusion and decreases productivity. For example, priorities are set and then suddenly shift. Moreover, they not only shift but also tend to proliferate far beyond people’s capacities or resources to achieve them.
In summary, organizations have to be careful not to institutionalize boundaries that need to evolve. Deepening your insights into what is happening, broadening existing boundaries, and lengthening your planning horizon are three ways to permeate your organization’s boundaries. Organizations also need to guard against allowing existing boundaries to slip unconsciously, for example by re-examining their priorities and workload. See for example The Fifth Discipline Fieldbook, Peter Senge et al, Doubleday, 1994  “You Can’t Be a Wimp – Make the Tough Calls”, Ram Charan, Harvard Business Review, November, 2013