Contradicting the bosses

5th September 2013, BUSINESS STANDARD Organisations that do not encourage people to speak up or highlight bad news run the risk of facing massive disasters

5th September 2013, BUSINESS STANDARD

Organisations that do not encourage people to speak up or highlight bad news run the risk of facing massive disasters

In the previous InnoColumn (Supporting creative failures, August 9), while discussing how organisations can support creative experimentation, I had referred to social context. This is about how people interact in a group, the jargon being group dynamics. I should narrate how the subject entered my consciousness.

In a company where I serve as director, a proposal to invest in an African country was discussed over three meetings over 12 months. There was a powerful, positive logic but, on the flip side, there were severe risks. The analytics were presented persuasively by the CEO: after all, a CEO must seem convinced if he or she is piloting a proposal. There was no table-thumping opposition from the directors, but there were many statements of risks and caution. The CEO saw these as encouragement, but it was the weak absence of
“no” rather than a clear “yes”. Finally, it came down to judgment and intuition – and after 12 months of deliberation and investigation, the directors agreed not to pursue the investment opportunity.

A few months later, an editorial about the sorry state of that African country appeared in a respected international paper. I shared the editorial with several directors with a “Thank God” note. Their individual response stunned me: everyone, including the CEO, said “I said so while opposing the proposal.” And I thought, if everyone said so, how come the project was discussed over 12 whole months?

The answer, it was postulated by one director, lay in the highly respected image of the board chairman. Directors perceived the chairman to be supportive, so everybody had spoken in such a muted way, that their message was lost completely!

History is replete with cases of epic and expensive failures, not because of lack of intelligence or technique, but because of a climate that inhibits free flow of suggestions. Very often not being able to speak up or bring forward bad news creates a spiral of silence that can result in disasters of massive proportion.

In How NASA builds teams, author Charles Pellerin talks about how ignoring social context caused his NASA team to launch the Hubble space telescope in 1990 with a flawed mirror. In hindsight, a trivial and avoidable error overshadowed the accomplishments of thousands of dedicated people and in the process squandering $1.7 billion of taxpayers’ money. Here is what happened.

After a textbook launch, the team soon discovered that the Hubble was launched with a flawed mirror. A detailed investigation followed and the findings were startling. A huge error was discovered in adjusting the null corrector used to figure the mirror that caused the flaw. The device was at the contractors’ plant. The hints of the mirror flaw existed in numerous tests. The review board wondered why smart technical people had not rigorously pursued these hints. It was found that the schedule and budget pressures caused them to move relentlessly forward.

The question was why the NASA scientists and engineers did not address these inconsistencies. The board then made a disturbing discovery. The contractor never forwarded these troubling results to NASA!! The board finally concluded that a leadership failure had caused the flawed mirror in the $1.7-billion telescope. NASA’s management of its contractors had been so hostile that they would not report technical problems if they could rationalise them. They were simply tired of the beatings.

In Outliers, Malcolm Gladwell alludes to case of frequent air crashes of Korean Air from 1988 to 1998. The captain’s social status was so high that the junior officer would at best be oblique, even in cases that required more than direct communication. Thus in most cases, this huge power distance led to the plane crash since co-pilots allowed the pilot to take major decisions even when they were questionable.

Charles Perrin explains the 4-D team building process that includes online behavioural assessment to help understand each other and measure the key driver of team performance: the social context. Mature companies understand the impact of culture and team climate and have created mechanisms to measure and monitor these soft indicators that practically impact everything, especially fostering innovation. Companies need to inspire employees to put their most creative foot forward and come up with new ideas, concepts, processes, inventions, or improvements.

Tata group’s innovation forum has developed a tool, Innometer, in alliance with Professor Jukian Birkinshaw of the London Business School to manage this much-required creative spark. It helps Tata companies to assess the social context in their departments, divisions and companies.

Innometer assesses the prevalent process and culture for innovation through surveys, one-to-one interactions and focussed group discussions. Innometer develops creative tension at three levels: within the company by pitching one function or geography against the other, between companies to encourage healthy competition and, finally, between a company and its global benchmark. The creative tension is palpable because Tata companies are used to being measured for business excellence processes.

To get positive traction out of this tension, Tata developed InnoVerse to identify challenges and provide triggers to employees to generate creative solutions. It is based on the concepts of Prof Clayton Christensen of the Harvard Business School. The group has derived benefit from theInnometer and InnoVerse through the willingness of employees to pitch in with ideas once the explicit and implicit barriers were broken.

Often in their pursuit to meet organisation’s aspirations, senior leaders have to push subordinates to outperform themselves. However, they also need to be careful about an environment of fear where opinions stop flying. It’s a tough balance, and that is why perhaps many leaders don’t get it right.

In the InnoColumn of the last four months, I have written a lot about the climate and culture within the company. There are other factors in play, not the least of which is serendipity, which will be the topic of the next article.