Embracing unpredictability

Image: Embracing unpredictabilityHow to guide, shape and implement organizational change in ways take into account the interactions, beliefs, attitudes, decision rules, and reward structures that cause changes in human behavior.
 

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Enterprises need to use models that adequately capture how organizations actually function.

Enterprise transformation is hard. It’s so hard that most transformation initiatives fail to deliver full value or fail to meet time and cost targets. One major reason these initiatives fall short is that they don’t take into account the interactions, beliefs, attitudes, decision rules, and reward structures that cause changes in human behavior. This article focuses on how to guide and shape organizational change in ways that do take account of these factors.

PwC's research on the success factors behind good transformation efforts has inevitably led us to models. There are many ways to define models, but for our purposes we mean the methods organizations use to simplify and address complex problems of all kinds. Enterprises know they can get more value out of their transformation efforts with the help of models, but enterprises need to use models that adequately capture how organizations actually function.

Most modeling efforts don’t acknowledge that enterprises are complex adaptive systems, systems that evolve in response to complex human interactions. Lacking this perspective, these efforts fail to make room for value-creating behavior that’s emergent, or unpredictable. Accurately anticipating and controlling the outcome of transformations requires that organizations model both their deterministic and emergent properties. One company that exemplifies the truth of this statement is 3M¹. The 3M example we use throughout this article focuses on the emergent property of innovation, something 3M is renowned for. But the truth is that transformation initiatives should make room for all significant emergent properties of organizations, regardless of the type of transformation effort.

Download Technology Forecast 2010, Issue 1 for the complete article



1. Brian Hindo, “At 3M, A Struggle Between Efficiency And Creativity,” BusinessWeek, June 11, 2007, http://www.businessweek.com/magazine/content/07_24/b4038406.htm, accessed October 12, 2009.