Critical Thinking in Organisations

How do we think when we are in organisations? Is it really up to the most senior person in the room to drive the decision process? What if someone questions them? Is that disruptive behaviour? Could formal thinking practices ever be as important as formal planning for organisations?

Introduction
Steve Jobs is meant to have said, “it doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”

We spend a lot of time finding the right people to hire for our businesses. In my various lines of business (and that goes from R&D, high tech telecoms and IT projects all the way through to plastics manufacturing, logistics and distribution) we have always tried to hire smart people, and the HR consultants I have worked with have provided numerous tests for personality, intelligence and thinking styles to help me make the right hiring decisions.

However once we have our smart people we often tell them to “just focus on your job and don’t worry about what else happens” (this is what my Executive Chairman told his senior leadership team in one strategy session, roughly 3 months before we went into receivership). Do we really exploit their collective intelligence?

Hence, it seems worth exploring how we expect individual thinking styles to fit into the organisations that we run. And to explore how organisations think.

Background

Over the past 30 years various academics, like Chris Argyris, Donald Schoen, Herbert Simon and Peter Senge, have explored the topic of organisational learning. Their work has resulted in significant advances in understanding how individuals and groups behave within organisations and topics like organisation behaviour, organisation communications, and so on are now firmly entrenched in HR practices. However, within all this literature it appears very little attention is given to thinking practices within organisations. It is almost as if thinking is regarded as a purely personal pursuit and not influenced by those that we work with, our managers, peers and subordinates.

It seems to me that thinking is an activity that precedes learning. The ability to apply different critical thinking models to a problem is an intrinsic part of learning. If we believe that organisational learning is a topic worth studying then surely the thinking styles and thinking models of the individuals that make up these organisations is also worth some serious attention?

Hence this short essay aims to open up some initial discussion of the common thinking styles that play out in organisations. The perspective is purely personal and is not meant as an academic discourse.

HIPPO Thinking

HIPPO stands for HIghest Paid Persons Opinion and reflects n common style that exists in many organisations where “the boss” gets the final say.

As long as hierarchies exist it is hard to get away from the HIPPO effect. Even when leaders say they are open minded and ask for contrary opinions, or try to stimulate debate on a topic, the clues come when the HIPPO opens his or her mouth. Usually that is the point where all argument disappears and consensus miraculously appears.

Modern organisations that extensively use data analysis techniques and embrace Web 2.0 technology as part of their culture are starting to erode the prevalence of HIPPO thinking (see 

http://sloanreview.mit.edu/article/the-decline-of-the-hppo-highest-paid-persons-opinion/) but it remains a dominant mode of thinking within organisations. Given the imprecise nature of decision-making within organisations (usually a choice between multiple options with no clear data to support any one option) then one of the toughest jobs for any team is to even be able to “spot the HIPPO” in the first place!

Action-Orientated Thinking

The Nike slogan “just do it” came to represent a generation of management thought in the 90’s and early 2000’s. For organisations that were seeing an increasingly changeable business climate and struggling with 5 year strategic plans the idea of becoming more action-oriented and being more responsive to change was appealing. Thus analysis was cut short as teams tried to find quick ways forward.

One important aspect of this approach is to ensure that there is a basis, or hypothesis, that underpins the decision and action taken. In this way, as results are measured, the hypothesis can be reviewed and action adapted to the changes. In fact such a system, if in place, would become classic single-loop learning system as per the Argyris approach.

The use of experiments to help design strategy execution in organisations appears to be increasing recently. One popular method is the Lean Startup. Whilst this method started in the Silicon Valley startup scene it has spread recently with big corporates taking The biggest danger with this approach is not to think through the possible outcomes and alternative strategies prior to taking action, resulting in a more random and un-directed approach to strategy execution.

Linear Thinking

I remember when I worked for Nokia and my boss, a gruff Finn named Jukka, used to start each call with me with a discussion that went something like this: “W has happened and as a consequence we have decided X this implies Y and therefore you need to do Z as a result”. It was inescapable logic and the way Jukka put there was no arguing against him.

A perfect example of Linear Thinking and the use of Deductive Logic. Possibly the staple for 90% of the organisations that I have been with.

One of the advantages is this fits perfectly well with Action-Oriented teams as the chain of cause-effect immediately spurs teams and individuals into action. But what if there is another explanation? Could it be that X does not immediately cause Y? Anyone who has studied cause-effect relationships will know of the lag factor that accompany some of them. Soil erodes for years before sea cliffs and ocean stacks fall down.

Still, Linear Thinking is easy to explain and serves as a simple tool to motivate teams and organisations around a course of action.

Systems Thinking/Lean Thinking

As a concept Systems Thinking has been around for a long time and offers an approach to dealing with complexity. There are several different “flavors” of systems thinking and it has achieved a lot of support from different academics and, via their consulting work, has been applied in a number of corporations. Systems Thinking is complex, it has its own language and it is often a hard practice to master. Especially as organisations have become bigger, more diverse, more global and with longer supply chains the result has been more complexity and, adding the new levels of open-ness that internet technologies bring, means it is harder than ever to master systems complexity.

Another form of systems thinking that has become popular recently has been Lean Thinking. Advocates of Lean may argue that it is different from Systems Thinking but I choose to bracket them together because both tend to look at how the entire system or supply chain satisfies the customer. Lean deals in feedback loops and in dependencies between parties. Due to the strong linkages between Lean Thinking and the strength of Toyota’s production system there has been a lot written about Lean and a lot of success for the movement. 

Lean Thinking has had challenges and it has taken time for organisations to adopt and benefit from due to the inherent change in thinking across the system it requires. Just shifting “waste” from your own inventory to a supplier does not eliminate the “waste”. It requires people to look at the whole value chain, to understand all aspects especially the handoffs between actors, to think in a systemic way and then to act for the benefit of everyone in the system. Very different from the “this is my job” approach that some take.

Business Model Thinking

Traditionally organisations have been executing well understood business models but the recent explosion of technologies like internet, mobile, Web 2.0, social and e-commerce have prompted a profusion of new business models and implementing new business models are now being reflected back into organisational thinking.

A large firm that I worked for had the advantage of being able to offer 3 different business models via its various product and service divisions. This gave rise to some interesting discussions regarding how best to approach different customers and customer opportunities. In essence we were having business model discussions at the sales decision point but what was interesting is that this appeared isolated from any business model framework.

Recently the work of Alex Osterwalder has brought a formal language and framework to business model thinking and, today, there are many thousands around the world that, through his books, podcasts and blogs, have come to apply a defined business model framework to their business thinking. Certainly reading Business Model Generation and Value Proposition Design cannot harm the cause for advancing business model thinking in organisations.

Creative Thinking and Design Thinking

Back in the 1970’s Edward de Bono introduced Lateral Thinking and Parallel Thinking as techniques and tools into organisations with the intent to help them solve problems more creatively. Over the years there have been many consultancies that have benefited from businesses who want to teach their managers to be more creative and several models have appeared (as well as the many de Bono techniques there are people like Tony Buzan with Mind Mapping, David Sibbett with his visual leadership series and many others).

More recently Design Thinking has become “the” trend for promoting creative thinking in organisations. Assuming it delivers on at least some of its promises and manages to establish itself within organisations this at least provides a different mental model and thinking approach to the pre-dominant analytical thinking styles that business adopts.

Behavioural Change Thinking

From the Hawthorne Studies in the 1920’s through Maslow, Herzberg, Vroom, Herbert Simon there has been extensive research into organisational behaviour. All of this has contributed to our understanding of how individuals behave within organisations and how they react to change. Buried within this work are models and assumptions related to people’s thought processes within the organisation. This tends to surface in terms of HR practices and OD practices within large organisations. Until recently not much of it was formally defined in terms of thinking practices.

Two recent topics of interest for me are the work of Dave Gray entitled Liminal Thinking, and the work of Roger L Martin entitled Integrative Thinking. Dave addresses behavioural change using the concept of thresholds or doorways that help people understand different (and contrasting) beliefs. The key to change is to be able to understand, shape and re-frame different belief systems.

With Integrative Thinking, Roger Martin addresses a similar concept but from the perspective of creativity. The key to creative thinking is the ability to hold two opposing concepts and form an alternate that is not a compromise between the two, effectively building a new and different approach.

So What’s This All About?

By now you are probably thinking what’s the point? Most of you will know the topics listed above and listing them is not a particularly challenging or thought-provoking concept.

Well the point is this. These (and others) are all legitimate approaches to thinking within organisations. Other than HIPPO thinking it is likely that you could find a role for each of these techniques in your own organisation. In fact you could probably add a few more. But very few organisations, perhaps none, will promote a variety of thinking approaches in the same way that they may suggest different management tools.

Often someone will suggest using a management tool, like Management By Objectives, or Balanced Scorecard, or Portfolio Management, but very few times (none in my experience) does an organisation suggest “let’s explore different thinking approaches for this area”. And I think that is sad. 

My desire is to create more discussion and debate around critical thinking in organisations. Through discussion and debate we raise awareness, through improved awareness we begin to raise our level of performance and through an improved level of critical thinking performance we should (deductive logic speaking here) improve our overall performance and that seems like a good thing to me.

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