Welcome to my interview with Rod Collins. Rod is the Director of Innovation at Optimity Advisors. He is a leading expert on the future of business and the author of Wiki Management: A Revolutionary New Model for a Rapidly Changing and Collaborative World, which highlights innovative practices for succeeding in a world reshaped by digital disruption.
Table of Contents
Click a link below to jump to a particular question of interest. (Note: some questions in the table of contents below are edited for brevity and clarity.)
- What is your best improvement strategy?
- How did you learn to tap into collective intelligence?
- Do all the 50 practices described in your book facilitate the discovery of collective intelligence?
- What is the new management vocabulary for managers of the 21st century?
- Would you please talk more about iterating, co-creation, and emergence?
- Why should we embrace chaos?
- Can people at any level in the organization use the practices in your book?
- Can you share an example of how the pace of change is impacting big business?
- Is there more transparency in a network versus a top-down hierarchal organization?
- Do you have one take away you’d like readers to get from this interview?
Bill Fox: What is your best improvement strategy?
Rod Collins: The best improvement strategy goes back to my days as an executive. The ability to aggregate and leverage our organization’s collective intelligence is what drove a tremendous level of improvement at the time I was with Blue Cross Blue Shield Federal Employee Program.
We were challenged with turning around our particular business unit, which had sustained two decades of low growth and performance. When we developed the capacity to bring together a microcosm of our business into one room and the processes that allowed us to aggregate and tap into their collective intelligence, solutions emerged that none of us could’ve come up with by ourselves.
This strategy wound up being the prime driver for turning that business around, and leading to what became the single largest five year growth period in the history of the business.
In most traditional organizations there is this incredibly powerful resource and it also happens to be their most untapped resource. It’s the collective intelligence of their own people, but traditional organizations lack the processes to get into it. The amazing thing is it’s fully paid for. All they need to do is get familiar with the processes.
Bill: Your strategy is in total alignment with what has evolved from all the interviews I’ve done at 5 Minutes to Process Improvement Success and now here at Forward-Thinking Workplaces. How did you learn to tap into the collective intelligence?
Rod: Actually we stumbled into it. When we recognized that we needed to do something to put the business in a different direction, the leadership team quickly recognized that perhaps the problem was we were following the only model of management that we knew, which is traditional top-down command and control management.
We were very good at issuing directives; however, this particular business was a business alliance with 40 independent partners because each of the Blue Cross Blue Shield plan is actually a separate company. We spent all our time with them arguing that we’re in charge and trying to get them to follow our directives.
We said maybe that’s the problem, maybe we’re following the wrong management model. We figured we had to learn how to manage by consensus. In order to do that we had to bring these different companies together in the same space. We needed to design a meeting format where we wouldn’t have endless debates among 40 independent partners.
We designed a process that was geared towards ending the debate using practices such as having periods of time where people could only ask clarifying questions. We put other mechanics in place to stop the perennial debates that most people are familiar with in meetings inside traditional corporations.
It worked very well and it enabled us to reach closure in a way that we hadn’t been able to do before, and in the process of getting past debate, we realized that we stumbled into an ability to cultivate our collective intelligence. It was something that we discovered rather than we went into by design, but once we discovered it we realized it was a tremendous and powerful resource. That’s how we learned about collective intelligence.
Bill: Do all the 50 different practices described in your book facilitate the discovery of collective intelligence?
Rod: Yes. Everyone of the 50 practices is used by at least one company. If I had to sum up the fundamental shift that is happening in management, it’s happening more quickly than people realize, we are moving from the paradigm of plan and control to the paradigm of iterate and co-create. The implications are quite dramatic.
There are two timeless accountabilities in management—strategy and execution. Those two accountabilities will remain the same, what’s shifting is how we do them. For the past 100 years the basis of strategy has been planning, now it’s iterating, and for the past 100 years the basis of execution was all about control. Now it’s about co-creation.
Once you understand that, you see why, in a plan and control model, you naturally begin to leverage individual intelligence by building top-down structures and by giving authority to managers over their subordinates. The idea here is the smartest people will rise up the organization and we give the supposed smart person at the top the broadest authority to direct the work of others. Essentially, command and control structures are designed to leverage the individual intelligence of the bosses.
In the new model, which is more appropriate for a fast-changing world, companies are no longer top-down hierarchies; they’re peer-to-peer networks. In peer-to-peer networks, planning and controlling doesn’t happen at the top. It actually happens with the people closest to the processes and there is no top in peer-to-peer networks, but there is a core. Leadership is more at the core and the leader’s role shifts to being facilitators of the organization to make sure that their processes are effective, iterations are effective, and co-creations are going on.
When people co-create things they’re highly engaged and more likely to follow through, and that is actually a better strategy for execution, especially in fast-changing times, than is compliance. In a fast-changing world, plans are of limited value, especially from a strategic perspective.
As a matter of fact, I believe that planning is no longer a strategic activity, it’s now a tactical activity, which is why the people close to the processes should do it. The strategic activity is fundamentally one of discovery because in a fast-changing world the image of a map, which is a type of planning device, is no longer appropriate. When the landscape keeps changing a map is totally useless.
What you need is a compass. we need to have a sense of direction and we need the organization to be continually co-creating what’s changing both inside and outside the organization and asking how do we need to adapt ourselves moment to moment so that we stay in the direction that we need to get to. That’s the process that companies like Google use.
I’ve read in the literature that, for Google, long term is about 90 days. They think anything beyond that is beyond our perspective to plan for in any meaningful way. They’re continually working in 90-day increments. That’s what iteration looks like.
Bill: In your book, you mention that people will need to become familiar with the new management vocabulary that describes the innovative tools of the 21st century business. These words include: serendipity, emergence, collective intelligence, shared understanding, and simple rules of self organization. Many of these ideas are rarely mentioned in most of the organizations I’m familiar with. And if they are, they seem to be more buzz words than actual practices.
Any one of these ideas is more than a 5-minute interview, can you address them collectively and suggest ways people and organizations might more fully move in this direction?
Rod: Yes, this goes back to this whole paradigm shift from plan and control to iterate and co-create. The reason the terms are unfamiliar is in a planning and control model there is no room for serendipity, or emergence, or simple rules. Detailed plans are laid out in advance. There are compliant instructions with many rules to follow and it assumes that the world is fixed and doesn’t change.
Quite frankly, for most of the 20th century those were valid assumptions, which is why command and control has been around for so long and why it’s been successful. However, we now live in a fast-changing world thanks to the digital revolution and in a fast-changing world with constant change we don’t have fixed plans any more.
The challenge—if you’re going to manage in the pace of change—is to get in alignment with it. Serendipity is important because it is a source of innovation and, in a fast-changing world, innovation and collaboration are the new imperatives that replace efficiency and productivity.
I want to hasten to add, I’m not saying that new management isn’t efficient or productive. As a matter of fact, I think it’s more efficient and more productive, but it doesn’t focus on those as the core responsibilities of management. It focuses on innovation and collaboration because those are the pathways to efficiency and productivity in this new world.
A lot of businesses realize they need to be innovative and collaborative. And if the IBM CEO surveys are indicative, they’re showing that CEOs have both these concepts on their mind, but my thinking is they don’t understand what the essential elements are.
When they think of innovation they think of inventions things like iPhones, Google Glasses, stuff like that. When they think of collaboration they think of people who enjoy working together. What they fail to recognize is the essential element of innovation is not the invention, that’s the outcome, that’s what you want to get to, but if you’re going to create inventions you need to have serendipity, which is the capacity to connect unusual things.
This is what the people of Apple are very good at doing. Thinking of combining a telephone with your music collection, that’s connecting unusual things. That product has changed the lives of all of us, to the point that when Steve Jobs died it was as if a rock star passed away. He touched so many people’s lives with his sense of serendipity.
The essence of collaboration is co-creation and hierarchies kill co-creation. Workers are engaged and involved around things that they have their fingerprints on. So if you’re going to keep pace with change, employees need to be co-creative.
Bill: You are highlighting several distinctions that are interesting to me, Rod. For example, this interview series started out as an exploration on process improvement. But for me personally, it has resulted in a lot of synchronicity and co-creation in many different forms. Most of the people I interview are referred to me through others, yourself included. They all add to the message in unexpected ways that has resulted in message that has been surprising to myself and others.
Rod: When you are iterating and co-creating, things emerge. That’s why it’s so important to tap into the diversity and the collective intelligence of an organization. When you have these capacities, the right things that you need to do tend to emerge.
This is the reason Google has free meals. It’s not because it’s going to be this great employee benefit, which Fortune Magazine always thinks is wonderful; they’re trying to enable serendipity by having people from different areas work with each other. In Google’s mind, all conversations are sources and seeds of innovation.
Bill: Your book shares interesting perspectives on chaos that goes against the grain of what I usually hear. You go on to say that in times of great change, the most successful managers are those who understand that chaos isn’t something to be avoided, it’s something to be worked through.
There are so many who talk about how to control or eliminate the chaos, and I’m sure many are fearful of embracing chaos. How can people and organizations embrace chaos and follow it to what’s emerging?
Rod: Managers need to recognize that no matter what industry, no matter what project you’re working on, they all have two basic phases: order and chaos. Our only choice as managers is the sequence. For the last 100 years, managers have been riveted and focused on order. As soon as a problem comes up, they immediately come up with a plan. They structure the plan very quickly, they give the commands, they appear to be in charge, and they march on.
Often times, because those plans are based upon short-sightedness and they don’t have a full understanding of the problem, there’s a lot of chaos in the 11th hour. But in the 20th century, the world moved slowly, and the 11th hour was long. Long enough for us to duly work and correct things.
That has all changed with the digital age. Now the 11th hour is more like a minute. What managers now need to recognize is they need to embrace chaos first, and let the order emerge. This is where this concept of emergence happens. I described before the process that we used in Blue Cross Blue Shield where we could bring a whole group of people together in one room, a microcosm of the business.
As we would start the work of tapping into collective intelligence, inevitably what emerged are things we didn’t know that we didn’t know. That’s the element that always pops up in the 11th hour with premature plans.
In the early part of these work-thru’s, as we would call them, there would be a lot of chaos and sometimes the level of anxiety would be extremely high. You could see everybody had a sense of “wow. this is worse than we thought.” My feeling was when that happened this was great. It meant we’re unearthing all the things that we didn’t know we didn’t know. To discover that before you do the work is incredibly powerful.
I call the process “work-thru” because chaos needs to embraced, so it can be managed and worked through provided you have all the diverse voices in one room. The other thing we learned is that there’s nothing as powerful as getting everybody together in the same room at the same time. It’s the key to speed.
This is counterintuitive for managers because they think they don’t have time to send people to all-day or two-day meetings. My feeling is: “No, you don’t have time not to.” When you have everybody present for a day or two like that, the time saved is incredible because when you unearth what you don’t know that you don’t know and you work through it, the order naturally emerges. Now it’s an order that everybody has first-hand experience about.
It propagates itself in the water cooler conversations. You wind up delivering things right the first time. Always put the chaos before the order. Let the order emerge and shared understanding will produce the results.
Bill: In an earlier conversation, I mentioned that more and more of my work is directed at helping people be the change at any level. Many people work in organizations where the leadership is simply lacking or non-existent in embracing these new practices.
What would you say to these people? Can they take any of these 50 practices you recommend in your book and begin to adopt them right where they are at any level?
Rod: They can. There are at least some practices there that will work in any person’s particular environment. Not all 50 will. Some of the 50 aren’t actually compatible with each other. For example, if you use the practice called “Kill the Killer, which means you go without bosses, then the practice known as the “60-to-1 Rule” doesn’t make sense, which is what Google uses where you have 60 people reporting to 1 supervisor.
That being said, people can look across the 50 practices. This was the idea we had in mind. Find perhaps 8, 9, or 10 of them that can work in their particular environments. Then use that as a foundation for beginning to bring change to their organizations.
What we need to do—and this is going to inevitably happen—is that the organizations that will survive will be those who have either transformed themselves into networks or have been created as networks from the start. An interesting observation, no major organization, in at least the United States today, that was created and born after the year 2000 is designed as a top-down hierarchy. They are all networks.
We may have seen the last top-down organization created, and it was done in the 20th century. I don’t think that we will see any large successful organizations in the 21st century designed as top-down hierarchies. They’re going to look more and more like Zappos. A company like Zappos is going to really change the arc of how new organizations design themselves.
Bill: That’s a stunning observation that I wasn’t aware of, and I think it speaks volumes about the pace of change and how dramatically it is changing things.
Rod: When I speak to audiences, I ask people to name one major organization out there today born after the year 2000 that’s a top-down hierarchy. There aren’t any. It doesn’t mean they don’t have supervisors. It just means the supervisors don’t have sovereign power. In some shape or form the organization functions more as a network. It’s important for people to understand just because you’re not top-down doesn’t mean you don’t have managers or even supervisors. It’s that the managers and supervisors don’t have this almost monarchy power over people.
You’re seeing this play out in the scandal at the Veteran’s Administration (VA). This is what happens with top-down. Lots of people knew it was wrong, but they couldn’t say anything because they feared being fired.
Bill: Rod, I’ve seen this dynamic at work in almost every organization I’m familiar with. If companies would eliminate the fear, the changes that would occur from that change alone would be dramatic I believe.
Rod: In a network you’re not fired for telling the truth. In a network you have places where you can bring things. There’s a lot more transparency. One of the great dangers of top-down hierarchies is there’s no transparency. The VA is just an example of how, in a top-down hierarchy, when things go wrong, the organization can become highly inefficient and highly unpredictable.
Bill: This has been a great conversation filled with very illuminating insights. Is there anything you would like to add or promote or anything you might want me to add to the interview?
Rod: I would just like to emphasize one more time the paradigm shift in management is a movement from plan and control to iterating and co-creating. It really changes the role of the leader. Leaders today are highly effective at iterating and co-creating processes.
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