TBM 319: Surfing Inertia and Pendulum Swings

Recently, I have been thinking deeply about what it would take to "dampen" some of the harsh pendulum swings we are experiencing in the industry. Does inertia rule everything? Are we powerless against inertia?

It is ironic because if there was ever a time to use the word agility, it would be now. Yet the idea of organizational agility has seemingly been corrupted by the failure to transfer any of the ideas around team-level agility to organizations as a whole. We expect team-level agility to thrive within 1950s-esque operating systems. It's like hundreds of speed boats tethered to the Titanic. This is not exclusive to "lagging" non-digital product companies. It's happening everywhere.

There are no silver bullets, but I think there are opportunities to dampen the swings through better org-wide sensemaking, incentives, less premature convergence on models, and normalizing shifts in structure.

Here are some notes from an internal talk I recently gave at a company on this topic.

Strengths, change, and inertia…

• Strengths. Some companies excel at fostering a lot of team independence, and some excel at coordinating many moving parts to achieve a common goal. The ideal is "do both"—aligned autonomy—but realistically, a strength in one area might offset a relative weakness in the other. 

• Portfolio of shapes. All companies have cross-cutting work that requires coordination. The core question is how often it happens. If it happens "once in a while," you can make an exception to how you operate. If it occurs "frequently, " you'll likely need to operationalize that reality. The same goes for deliberate efforts to silo off certain teams to focus on specific outcomes. It always happens—the question is how often. 

• The shifting balance point. The balance between independence and coordination is always shifting. If a company leans heavily into fostering independence, it can strain its coordination efforts. If it leans too heavily on coordination, it is harder to maintain team autonomy (or at least the perception of team autonomy).

• Macro influences. The macro-environment often dictates the balance point between independence and coordination. A push for growth and diversification will push things in one direction (independence at the expense of some coordination). A push for profitability, end-to-end experience, and focus will push things toward coordination at the expense of some independence.

• Time. Time is always a factor. While a company might start with the "perfect" organizational structure, dependencies and complexities naturally build up over time. When that happens, the company faces a choice: either work to eliminate those dependencies and re-establish independence, or improve its ability to coordinate them to achieve org-wide goals.

• Inertia. In theory, a company can find the balance point at all times. In reality, you are dealing with inertia. Inertia develops, and the pendulum swings become more pronounced. It is not a steady equilibrium. A speedboat can turn on a time. A larger boat cannot.

• Counteracting inertia. One major takeaway from the last few years has been just how powerful organizational inertia can be and how wide the pendulum swings can get. This should serve as a wake-up call for leaders. If you don't counteract the inertia, you risk ending up in situations where drastic and disruptive restructuring is the only viable way forward.

Wishes vs. reality…

• Illusions of independence. We often tend to convince ourselves that teams are fully independent and can act autonomously. We do this despite the evidence of mounting dependencies. The big challenge is that there may be no systems, structures, or norms to acknowledge and communicate this reality. Say the company thinks of "program managed" efforts vs. team efforts. Meanwhile, there is a middle gray area of highly dependent efforts with no assigned program manager. In terms of operating principles, those efforts are a black box. If you have sixty people working on a project, a traditional, slower-moving company might visualize everything: huge Gantt charts, dependencies, etc. However, a fast-paced, growth-oriented company might go to great lengths to maintain the illusion that the effort is highly independent and that solo heroic managers can keep it on course. 

• Illusions of necessity. In contrast, you also have teams that have adapted to high levels of coordination. They build systems AND their professional identity around the work around the work. Over time, you risk losing sight of whether the heavy coordination was intentional, a temporary scaffold, or a necessary response to a (now outdated) strategy. You can end up with a murky situation where it is unclear why certain roles, rituals, and structures existed in the first place.

• Aspirations vs. reality. It is important to be aspirational and understand what an "ideal" looks like. However, when reality diverges too much from these ideas, it can be harder for people to address reality. Unrealistic ideals can discourage honest and open discussions about what is happening. 

The adaptive capability to monitor and respond…

• A legitimate capability. The ability to continuously monitor the organization's needs and take action to adjust the balance between independence and coordination is a legitimate capability. It combines skill, knowledge, experience, tooling/technology, etc. 

• Scaffolding is an important sub-capability. It involves establishing a temporary structure or support system to help your company navigate a transitional period. The key part of scaffolding is that it has an expiration date. You broadcast your intent to remove the scaffold. Why is this important? If you aren't good at scaffolding, you are likelier to operate in fits and starts with more disruptive changes.

• Layers of certainty. It is hard to predict our ideal organizational design for the future, especially in a highly dynamic situation. Yes, some aspects of the strategy have a higher likelihood than others to be the same over the long haul. And other aspects that will almost certainly shift. We aren't flying completely blind—but it is delusional to believe we can predict our strategy a few years from now. That said, we CAN build that dynamic capability to dampen the inertial swings. While controlling shifts in the market or other external factors is impossible, a company can develop the adaptive ability to respond more effectively and navigate the shifting currents.  

Normalizing adaptation…

• Things will change. One way to strengthen this capability is to normalize change and restructuring "as you go" while also normalizing the idea that you might be running multiple concurrent operating models as a company. This is something that ALL companies can do. It is within reach. 

• Incentives. Incentives play a huge role. If people are incentivized based on the assumption that their domain will remain static with its current structure, they'll adopt certain fixed behaviors reinforcing that structure. However, if incentives are aligned with an adaptable mindset—one that values overall success and embraces change to achieve that—you'll end up with behaviors that support surfing the currents with more grace.

• Sensing. It is impossible to adjust effectively without a clear sense of what is happening and how things are evolving. This is a huge opportunity that companies often overlook. A big issue is how organizations go about "monitoring" and "observing," which are usually misguided and create more trouble than they are worth (e.g., forcing everyone to work in 2w sprints or misguided metrics). But if you focus on sensemaking and understanding where you're at regarding the balance point and current trajectory, you're setting yourself up to dampen the pendulum swings.

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