• 07.06.12

The Company Chaos You Don’t Know You’re Creating

If you don’t address the unexamined cracks in the foundation of your business, the slightest market sneeze might blow your house down. Now’s time to shine a light on those blind spots–before it’s too late.

The Company Chaos You Don’t Know You’re Creating

For many of you, I won’t need to define organizational chaos. You know exactly what I am talking about: shifting priorities, unclear direction, unstable processes, unhappy customers, disengaged employees. However, I find that most organizations have become so accustomed to chaos that they don’t even recognize it.


Or if they recognize it, they don’t believe there’s anything they can do about it. It’s business as usual. In fact, sadly, many organizations seem to have embraced chaos and called it a good thing. One example is the rising number of job descriptions that include “tolerance for ambiguity”as a necessary skill. Let me be clear: Chaos is never a good thing for an organization. While the world is fluid, and increasingly so, this is no excuse for ambiguity and chaos inside organizations.

There is a need for flexibility–which I prefer to call, as earlier, resilience–but that is an entirely different thing from internal ambiguity and chaos. Rather than asking your workforce to accept and develop a skill set around coping with chaos, you should be doing everything you can to reduce the chaos to begin with.

I’m also not talking about energizing chaos–the type of externally driven change from customers and competitors that stimulates innovation, reduces complacency, and spurs teams to achieve new heights. Not only is this type of chaos largely unavoidable, in small doses, it’s highly desirable.

I’m talking about the undesirable type of chaos–self-inflicted chaos–the disorder and confusion that your organization creates on its own and, by extension, has the power to reduce or eliminate completely. I’m talking about the type of chaos that robs your business of the energy it needs to innovate and respond to the marketplace’s ever-increasing demands for faster, better, cheaper. Chaos sabotages your ability to provide value to your customers, satisfy shareholders, and offer a work environment that doesn’t break employees’ spirits. Left unchecked, chaos destroys everything that’s good about an organization, its products, and the people who make them.

Chaos is the enemy of any organization that strives to be outstanding. Here’s how it works: Chaos inserts hairline cracks into what could be an otherwise robust structure. Under pressure, these hairline cracks begin to grow, weakening the foundation and organizational supports that you need for execution.

The results your business achieves are based not only on how you execute but also on the foundation–the organizational behaviors and conditions–on which that execution is built. When the foundation is cracked, the results will be unstable and far from excellent on a regular basis. In fact, your execution frequently will wobble from one project or initiative to the next, from one product launch to the next, and from one customer or market segment served to the next. A rousing success will be followed by a miserable failure. And each failure will be slightly different from the last, so the countermeasures you put in place, in an attempt to be a “learning organization,”don’t make much of a difference.

By reducing the organizational chaos that is completely within your control, you not only establish a solid foundation on which excellence can be built, but you also free up the psychic energy and resources you need to cope with the truly unforeseen circumstances that businesses must navigate from time to time. Building a strong foundation enables you to evolve from expecting results to actually achieving them. To build a strong foundation, you need to look at the root causes of organizational chaos.


Missing the Trees for the Forest

In many of the organizations with which I’ve worked, I’ve noticed that managers and workers simply don’t see the chaos or the causes of chaos around them. The types of behaviors that result in chaos usually are not purposeful, but in many cases they have become habitual–which makes them all the more damaging to an organization striving to be outstanding.

Habits are nearly invisible. You engage in them without realizing they are there. And you can look at another organization that is succeeding and not notice the real differences between how that outstanding organization behaves and how your organization behaves. When looking at outstanding organizations, you may miss the important trees and just see the forest.

This type of blind spot is similar to what is known as the Dunning-Kruger effect, after the two psychologists who described it. The Dunning-Kruger effect notes that people who are

truly incompetent don’t know that they are incompetent. They lack the knowledge that allows them to understand the difference between competence and incompetence. if you apply this concept to the world of organizational performance, you begin to understand why organizations often adopt improvement tools and isolated components of holistic improvement philosophies but consistently fail to see the things that truly make a difference in performance.

My colleague Tim Ogden introduced me to the work of economist Lant Pritchett, who describes this process as isomorphic mimicry, a phrase that means the copying of forms rather

than functions. It’s similar to, for instance, non-venomous snakes that have evolved to look like their poisonous cousins.


These pretenders will fool you if you don’t look too closely, but they can’t execute when it really matters. Pritchett uses it to explain why so many years of work by high-powered consultants and billions of dollars of aid to developing countries hasn’t produced well-functioning government institutions. These efforts often have been focused on getting the governments to mimic the government institutions in developed countries as they exist today. But these institutions usually developed and changed over a long period of time and work only because of the behaviors, capabilities, culture, and habits that developed.

Isomorphic mimicry is a great description for what has happened particularly in the Lean movement. When Toyota’s success first came to the attention of Western auto manufacturers in the 1970s, Toyota’s efficiency and productivity were so much greater than those of its competitors that executives at Ford, General Motors, and Chrysler simply didn’t believe that the stories they were hearing were true. This led to an avalanche of attempts to document what Toyota did differently. The conclusion of many of these early studies of Toyota focused on the tools they use–pull systems, work cells, and the like. Scores of companies copied the tools–they mimicked what they could see was different–but failed to notice all the foundational elements that truly make Toyota’s lean system work. These organizations didn’t notice the cracks in their foundations, cracks based on invisible habits and behaviors.

Karen Martin, The Outstanding Organization, ©2012, McGraw-Hill Professional; reprinted with permission of the publisher.

[Image: Flickr user Camilo Rueda López]