John Hagel on the Impact of Complexity on People and Organizations

Speaking at the Global Drucker Forum in Vienna, John Hagel (co-chairman of Silicon Valley-based ‘Deloitte Center for the Edge’ research center) warned audiences of the dangers of become institutionalised in business in this times of complexity.

To become an institution, ways of doing things must become established, almost fossilized. The Red Queen in Lewis Carroll’s ‘Through the Looking Glass’ runs faster and faster but never moves forward. Hagel argues that most organizations are even worse off – the faster they run, the more they fall behind. Institutions, he reminds us, were invented in the first place to provide scalable efficiency. It’s a model that has served us well for decades, allowing us to achieve far more in organizations than we ever could alone, but Hagel believes that we now need to move towards a new focus: scalable learning. To achieve scalable learning, we must always be learning, and learning how to learn faster.

The problem is, scalable efficiency and scalable learning are at odds with each other. Scalable efficiency means predictability, standardisation – there is no room for experimentation or improvisation, and therefore no opportunities for learning.

So what three things must we bear in mind if we are to take scalable learning seriously?

  1. Redesign our work environments

By this, Hagel means not just our physical work environments, but the virtual systems we use and the human or management systems we live by. The rising popularity of design thinking has led to improvements in product design and customer experience. Now is the time to apply design thinking to ourselves in our work environment.

Ask yourself: if we identified scalable learning as the top priority, how would we redesign our work environment?

Hagel shares the example of LiveOps, whose 20,000 employees work from home instead of from a call center. They have personalised dashboards to give them real-time feedback on their performance and gather around virtual forums and communities to discuss issues. Employees are rewarded for their contributions and their mentoring in these communities.

  1. No matter how many smart people you have in your organization, there are a lot more smart people outside your organization

Quoting Bill Joy, founder of Sun Microsystems, Hagel explains that organizations must figure out how to connect with the smart people outside ours organizations. How can we create relationships where we learn faster from each other?

  1. Instilling passion in every participant in our organizations

Hagel cites an example of a survey he ran in the US which found that only 11% of Americans were passionate about their work. If we are measuring the success of scalable efficiency, this is a great result because it depends on squashing passion. For scalable learning, however, it’s a problem. Passion is needed to accelerate social connection and learning at every opportunity.

Hagel’s vision for a future of scalable learning is compelling. For one thing, all the research and theory is telling us that scalable efficiency is no longer sustainable in today’s VUCA (Volatile, Uncertain, Complex and Ambiguous) world. In fact, it’s entirely unproductive. Scalable learning is both more financially viable and more appealing to us as human beings. All three of Hagel’s points above signal a new kind of organization, one which is designed to provide the conditions for learning, social connection and passion to produce increasing returns on performance.


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