For Leaders Seeking Resilience, Agility & Innovation – Context is King

Agility, resilience and innovation are some of the key organizational characteristics that any astute business leader will be seeking to nurture in the current environment. But most organizations are congenitally incapable of incubating, growing and leveraging these skills to their advantage.

Resilience is not the dogged ability to persist or the ability to bounce back. It is the ability to adapt in the face of adversity – faster and more effectively than the competition. It’s an evolving response to the challenge of a changing world. It requires the agility to think and act at pace and the ability to effect appropriate change.

Most organizations fail to move at pace because of how they are structured to make decisions. Information moves to authority at the top of the hierarchy. A system optimized to exert control by senior management.  Middle and junior level leaders are good at compliance but neither enabled, encouraged or given sufficient context to think for themselves.

Douglas Bader, the RAF spitfire ace, who flew despite having almost been killed and losing both his legs in a plane crash before the war once remarked that, ‘Rules are for the guidance of wise men and the observance of fools.’ It’s amusing and some might argue it’s trite or even dangerous but in the pursuit of understanding how organizations develop resilience there is something to unpick here and in part it is well illustrated from an incident that occurred in a First World War Naval Battle between elements of the British and German high seas fleets in January 1915 over the Dogger Bank in the North sea.

The British had the better of this engagement and an opportunity to prevent the German ships escaping back to port.  The British commander, Admiral Beatty sent an urgent flag signal to a part of his feet under Capt. H.M. Pelly, (his radio had been destroyed in the fight). The signal read, ‘Attack the enemy’s rear’ Beatty could send no further communication as Captain Pelly’s 4-ships disappear pursuing the German rear contingent – also made up of four cruisers.  Pelly catches them up and 1-German ship is quickly disabled. Instead of leaving this lame duck and pursuing the remaining German fleet Pelly’s ships remain to sink the disabled German vessel and the remainder of the German fleet escapes.

A review of the action afterwards resulted in Captain Pelly being accused of cowardice stating that he joined a pile-on against the damaged German ship instead of defying Beatty’s signal and forging ahead to hunt any undamaged ships and so fumbled away a decisive victory.  The First Sea Lord, the head of the Royal Navy fumed that ‘In war the first principle is to disobey orders, any fool can obey an order’. Not a sentiment that would have found widespread support in the command culture of the Royal Navy at the time!

Pelly and all other British Naval officers had been taught to strictly obey orders – to unquestioningly obey the rules. In effect they were specifically taught, not to think for themselves – there was certainly no concept of intelligent disobedience.

Why is this of note to business leaders now? The incident usefully illuminates the difference between a problem and a task. The task is represented in the senior commander’s order – ‘attack the enemies rear’. But the problem is actually that the German fleet is getting away. Pelly stays focused on the task and joins the attack on the enemies’ rear – even though these ships are already damaged and incapable of escape. By focusing on the task, Pelly ignores the problem and the German fleet escapes.  The same misalignment is all too common in business today and the incident equally shows up how easy it is for 1^st and 2^nd order effects to be misaligned. The short-term win actually gets in the way or your real objective. A culture of compliance and control, over freedom and responsibility prevents any agility of thought or action and leaders with the most relevant and recent information often lack sufficient context to act effectively at speed.

As a contemporary counter point the culture at Netflix is informative, especially since their CEO Reed Hastings in part describes the culture as ‘no rules’.  For a large publicly listed company, valued at well over $200 billion, Netflix has remarkably little corporate governance and few rules beyond the guiding principle to act in the company’s best interest. Leaders are encouraged and taught to lead with context not control. In other words, to create understanding of what acting in the company’s best interest means, which is then paired with both the freedom and the responsibility to act. This culture is at the heart of the company’s consistent ability to evolve; moving from mail order to online streaming, from licencing content to producing award winning original content and from a base in the US to a service in over 190 countries worldwide.

Context is the key to being able to distinguish between a task and the problem and the key to being able to exercise judgement.  If you really want to be able to innovate, move at pace and evolve faster and more effectively than the competition understanding what gets in the way and how to address that are first steps.  As Steve Jobs said. ‘it’s better to be a pirate than join the Navy.’