Did you know that companies are full of would-be heroes? They are the managers of subunits, units, functions, and any other subdivisions of the company. They are doing their jobs, keeping their units efficient and fulfilling their goals, but what they really want is a crisis of some sort—a crisis that brings out their true potential as heroes who can make the necessary changes, right the course of the units they are managing, and prove that they should be promoted to greater responsibility.
We like heroes. Companies promote heroes. But few ask the question of whether there are situations in which a hero creates loss for their company, even as they are trying to win by overcoming a crisis. Recent research by Julien Clement published in Administrative Science Quarterly looks at this question and finds some worrying answers. The context for drawing these insights is interesting, by the way, and explains the choice of hero in the illustration. He studies teams in the online game DOTA 2, which experienced multiple challenges due to rule changes.
The start of the insights drawn from the research is that organizations are coordinated systems, so any attempt to change one unit can have consequences for other units. Change in one place usually makes the entire system a little worse, until corresponding changes are made elsewhere. When heroes do their work, they also put other heroes to work.
That is only the start of the insights, though, and the continuation is worse. It is important to also ask why a crisis happens. Maybe it is because the hero’s particular unit experiences a local problem, for example related to the technology it operates, the inputs it gets, or the market for its outputs. But it could also be because of a system-wide problem that affects the entire company. If that happens, problems will occur in multiple units at once, and the changes to each unit will affect other units, creating a very confusing environment where it is hard to tell the difference between the original crisis and the new problems created by other units’ changes. When heroes go to work on the same problem and don’t coordinate, the problem can grow bigger.
If heroes might lose, then what is the alternative? Simple. Any organization has a center, and when the entire organization is hit by a system-wide problem, the center needs to take charge. This is the time for a CEO and top management team to diagnose the system-wide problem and search for a solution. The system needs to change. Of course, the heroes can still be given work, but the task of each one should be defined and distributed centrally. (Notice how this explains why the Marvel heroes always struggle unreasonably much given their abilities – they are not centrally coordinated, but their adversary is.)
The lesson for an organization is clear. The idea of operating it as an independent adaptive system is wonderful for the sequence of small and local challenges that constitute its daily life. At the same time, it is exactly the wrong approach for dealing with larger, system-wide problems that occasionally happen and sometimes spell the difference between success and failure.
Clement, Julien. 2022. Missing the Forest for the Trees: Modular Search and Systemic Inertia as a Response to Environmental Change. Administrative Science Quarterly, forthcoming.
This blog is devoted to discussions of how events in the news illustrate organizational research and can be explained by organizational theory. It is only updated when I have time to spare.