Wednesday, October 12, 2005

Improvisation and Bureaucracies

Leadership style plays a huge role in the success or failure of an organization. IMHO, the best leadership style is to create a clear purpose and provide a strong guiding philosophy of how to make decisions for the good of the endeavor, then turn people loose.

From the standpoint of systems theory, improvisation is what makes life possible. In natural systems, the needs and environment of the system impose operating constraints on the subsystems, while allowing the subsystems considerable freedom to optimize within those limits. Within the rules, subsystems are capable of a wide range of actions and adaptations: just consider the incredible variety of life on this planet!

Arguably, some environments and rule sets are better than others for encouraging life or economic activity. The genius of capitalism is that the rules encourage people to find a niche and create more wealth. The idiocy of communism is that the elite seek to control every aspect of society and the economy. Communists aren't the only idiots either. Consider the mullahs, writes Michael Ledeen:
The tyrannical Islamofascists obviously despise and dread their people; otherwise they wouldn’t be constantly seeking new ways to make sure there is no independent thought and certainly no independent action. All those madrasas, for example, are extended experiments in what used to be called "rote learning." The children sit around and memorize the Koran and the sayings of the prophet, blessings be upon him. But, unlike the schools in the civilized world, nobody ever asks anybody else what he thinks about anything.

In a world like that, several things happen. Above all, creative activity ceases to exist, since culture depends on advancing knowledge and improving understanding. Neither of these interests the clerical fascists who rule the terror countries. They want good little Muslim androids, who will accept the preposterous belief that all knowledge was acquired several centuries ago and that man’s only worthwhile intellectual activity is to imbibe that knowledge in order to recite it when called for.

Large organizations, including government bureaucracies, can encourage or stifle innovation by dint of the corporate culture and leaders' style. Arnold Kling, at TechCentral Station, writes in "The Planning Illusion:"
I think that people have a tendency to put too much faith in centralized planning, and they do not have sufficient regard for decentralized improvisation. The more ambiguity that exists in a situation--because of its novelty, uncertainty, and the absence of critical information--the more that it favors improvisation over planning. [...]

When something goes wrong, there is a natural desire to blame a lack of planning. In fact, with hindsight, it is always possible to come up with a plan that would have worked better. I would refer to this as the planning illusion. This illusion causes a number of problems.

First, the planning illusion leads to the syndrome known as "planning for the last war." Organizations develop a set of operating strategies that are based on theories that are outdated, or just completely misguided.

Second, faith in planning causes organizations to become overly centralized. Information from peripheral sources is ignored. Flexibility for field-level decisionmaking is denied.

Finally, faith in planning leads people to believe that government has a solution for every problem. In many cases, better approaches emerge from decentralized improvisations.
It's worth a read, along with the companion piece, "The Impossibility of 'Planned Improvisation'."

Related post: Nimble Bureaucracies