As-Is scenarios: strategy & functional stupidity

Guest post from Michael Woudenberg, author of Polymathic Being

This essay looks to pull back the curtain of what allows the status quo (your As-Is scenario) to not only survive but thrive in most modern businesses.

Introduction

I was recently listening to a podcast called The Intelligent Workplace on the somewhat ironic topic of “The Unintelligent Organization.” It does help to contrast your goal against reality and the episode was fantastic especially when the guest, Matt Moore of the University of Technology Sydney, introduced the concept of functional stupidity.

As Matt put it in the podcast: “...functional stupidity goes on where it is normal for people to be excessively narrow and focused in their thinking. And when that leads to largely positive outcomes...”

But this isn’t Matt’s idea, as he’s building off of the 2017 book by Mats Alvesson and André Spicer titled “The Stupidity Paradox: The Power and Pitfalls of Functional Stupidity at Work.”

The interesting aspect of the entire topic is just how widespread this paradigm is among organizations everywhere.

Functional Stupidity

I think this concept is, if not the foundation, at least the cornerstone of what we explored earlier in The Successfully Unsuccessful.

It’s the behaviors, over and over, that everyone says they don’t want, but keep doing, and keep getting rewarded for, while so many, who try to break the cycle, are penalized.

And the behaviors mentioned, I’d group under the definition of Functional Stupidity where it is normal for people to be excessively narrow and focused in their thinking. And when that leads to largely positive outcomes.

But what positive outcomes are we talking about? Revenue? Profit? Cost Reduction? Affordability? Innovation? Market Share? Employee Engagement? Retention? Actually, none of these even matter to the equation. They are merely what we say we want as any good business leader quickly learns. But what they also learn is that there is a lot of forgiveness for missing these targets, especially if you don’t challenge the status quo.

The positive outcomes that are being referred to aren’t for the organization, but for the individual members. Do they still get promoted? Do they get acceptable performance reviews? Are they acceptably paid? Is there any real pressure or penalty for missing business goals? Are they well-regarded by peers and leadership? These are the positive outcomes that allow it to be normal for people to be excessively narrow and focused in their thinking.

What’s missing here is epic. Are they well-regarded by their teams? Do they actually support change management? Are they really open to new ideas? Do they empower employees? Do they actually make the system better than when they started? The answer, more often than not, is no, and I’ll provide two anecdotal stories.

The repeat-offender manager

The first was a factory manager who was always well-regarded by leadership, was respected, and was around for a long time. Yet when you actually looked at his performance, there wasn’t a person actually working in their factories who had much good to say about them. It became even more evident when investigating a very serious compliance escape that threatened to shut down billions in product shipments due to poor process control driven by poor culture. And yes, this culture stemmed from this leader. When we dug in we found out that this was the third time this manager had been in charge of this level of mistake. Our root cause investigation also found damning evidence of poor leadership culture...

Fast forward three years. This leader is now in charge of a different factory and just deconstructed the entire industry-best-practice layered tier meeting structure and instead piled 100 people into a conference room where no one knew what was going on with anything. Performance was already slipping and they were heading back toward chaos.

Why was he even there? Well, he actually got rewarded for each of the times he oversaw those major compliance issues. Somehow, leadership overlooked or forgot that he caused the problem, and actually rewarded him for the recovery.

The one-size-fits-all manager

The second was a manager who had a nearly comedic response to anything with a broader strategy, a one-size-fits-all solution to all problems.

Regarding a chance to establish a holistic data architecture to tie together three separate pipelines into data storage with a common semantic ontology (i.e. common data types into a common organization), he’d ask, “Why don’t you focus that into a proof of concept on a specific area?” Well, because if you narrow the focus down to only one of those pipelines, you lose the very essence of ‘common’ and will never realize a robust dataset for more advanced analytics.

Or regarding the establishment of cybersecurity controls on a SaaS offering, when the customer had already clearly articulated what they wanted, he asked for the same kind of proof of concept. Again, why not? Because cybersecurity controls are a gap assessment, not a proof of concept. Fundamentally, the compliance controls for a scaled-down version most often do not work at a larger scale. You have to start with the larger system and put the right security controls in place to enable scale and growth.

In both cases, the proof of concepts could have been completely successful and yet at the same time absolutely miss the actual goals the business hoped for. We confirmed this concern when we analyzed the system architecture of the overall product and found that it was a mess of bubble gum and bailing twine holding together dozens of proofs of concept that no one ever worried about scaling or integrating.

And yet this manager is still there, still promoted, and still pushing the same myopic solutions.

What we mean by functional stupidity

It is of critical importance to note that functional stupidity is not a lack of individual intelligence, rather it is a failure of the system or the way of thinking.

Functional stupidity is a term that describes a situation where people or organizations are highly skilled in their area of expertise, but lack the ability to think critically, creatively, or strategically. This can lead to problems such as decision-making paralysis, the inability to adapt to change, or the inability to see the consequences of their actions.

To expand a little further, functional stupidity is a phenomenon in which people in an organization or company do exactly what is expected of them without questioning it, even if it may be detrimental to the organization. It can lead to a business collapsing in on itself due to a lack of critical thinking and reflection. It’s where smart people are discouraged from thinking and reflecting at work, leading to functional stupidity.

Some common causes of functional stupidity are groupthink, the over-reliance on established procedures, and a lack of curiosity or of creativity.

Solving Functional Stupidity

While this essay may feel kind of bleak, I think it’s important to forthrightly face the reality of what many of our organizations deal with day after day and to name what allows the successfully unsuccessful. We need to address why we say we want innovation and then never realize it. And this thing is the functional stupidity of myopic thinking, rote execution, and accountability mechanisms that allow a failure of the system or the way of thinking.

Yes, it exists even with brilliant experts, dutiful engineers, talented leaders, and well-intended organizations. We have to accept that the Harvard Business Review and McKinsey make tens of millions of dollars a year studying, writing, and addressing the problem... But there is a lot that we can do ourselves once we name and accept what we are dealing with. We aren’t incapable of fostering change, but to realize the change we must first accept the problem so we can better contextualize the solutions.

To take the first steps toward a more intelligent organization, here are several ways to eliminate functional stupidity and promote more effective decision-making and problem-solving within an organization or group:

• Encourage critical thinking: Incentivise your people to question assumptions and challenge the status quo, to try out different perspectives and reasoning when making decisions

• Promote diversity: A diverse group of people with different perspectives and experiences is more likely to identify and solve problems than a homogenous group. And a diversity of opinion should lead to positive, creative conflict.

• Encourage open communication: Reward people for speaking up and sharing their ideas, concerns, and constructive, even painful feedback.

• Foster an environment of continuous learning, experimentation and innovation, including testing of new ideas, even if they may fail.

• Encourage reflective practice, in which individuals reflect on their actions and decisions, and learn from their mistakes.

• Break down silos: Drive collaboration across different departments and teams as well as with external organizations, such as suppliers, customers, and other stakeholders, to bring new perspectives and ideas to the organization.

• Create a culture of accountability: Don’t allow repeat offenders to thrive, instead observe, measure, and report transparently on individuals and teams, so that they take responsibility for their performance and act to improve as a group.

Now if your first reaction is to say this is straight out of an MBA textbook, my argument is straightforward: are you applying these solutions to a status quo organisation, an As-Is scenario, to an organization you know to be functionally stupid? If not, then any attempted organizational change is at risk of failure.

Something else you will probably have recognized by now is that these recommendations fit the definition of having a Polymathic Mindset very well. I encourage you to dive deeper into the Polymathic Being and discover why.