Thinking The Unthinkable

The importance of imagination in minimising organisational failure By Oliver Nyumbu

The average corporate life expectancy currently stands at 14½ years and declining - compared to some business organisations that are over 1,000 years old. It seems evident, therefore, that organisational failure, whether gradual or dramatic, is endemic.

Whilst research into organisational success abounds there is little detailed study into the causes of failure, other than external economic factors. Caret has recently been fascinated by a study into the investigation reports of three great organisational disasters of our time, carried out by Jenna McGregor of Fast Company Magazine. She says: ".each report stresses one of three factors - imagination, culture, or communication - as the greatest culprit in ignoring, trapping, or suppressing crucial warning signs. These were the factors that made the blinking red signals so hard to see."

Institutionalised imagination

The most devastating of them all, the September 11 tragedy, demonstrated the US Government's startling underestimation of the Al Qaeda threat. This lack of imagination was regarded as "the most important failure" on the part of the leaders. The investigation report advised the US Government to practice 'institutionalised imagination' and habitually welcome 'disruptive intelligence' - information that seems to contradict or cut across accepted wisdom.

Similarly, the long-awaited verdict on the Hatfield rail disaster judged it to be the result of sustained negligence and a 'cavalier' attitude to safety, creating "a systematic failure of the industry as a whole". The disaster prompted a shift in the entire industry away from a ' find and fix' attitude to one of 'predict and prevent'.

'Thinking the unthinkable' is not a new concept. The phrase was coined in a pioneering 1962 book by futurist Herman Khan, who argued for the US to systematically imagine an unthinkable post-nuclear future and plan for survival. This advice was revisited all too recently in the devastating aftermath of the 2005 Hurricane Katrina , when Eamonn Kelly of the Global Business Network wrote: "..both the magnitude of the damage caused by the catastrophe and the extent to which it came as a surprise are entirely predictable. The real failure is that we still have not learned first to think the unthinkable and then believe it."

Time for reflection

So how do organisations institutionalise imagination? How do they thrive and survive through inevitable disruptions and crises? Professor Jagdish Sheth of Emory Business School cautions against 'complacency' and 'ego' within organisations. "People end up believing what they do will succeed forever and then they become resistant to change. They get locked into one paradigm or one way of life." Imagination, he asserts, requires reflection, ".recognising and contemplating the possibility of failure can stimulate the kind of thinking required for sustainable success." Scenario planning has long been regarded as a means by which to imagine multiple potential futures. However, this exercise is rarely conducted frequently enough to be sustainable, and can all too easily fossilise around two or three scenarios. This can provoke the opposite effect to 'opening' imagination - as Shell found to its cost.

The pressure to make decisions 'on the hoof' can have potentially catastrophic consequences - consider Hoover's free airline tickets campaign disaster, which led to virtual PR suicide and the company's near-collapse; or the declining tenure of chief executives who become anxious to make their mark in a hurry, at the expense of adequate time for reflection and imagination

An important way to ensure an organisation does not become complacent and 'unimaginative' is to ensure that the leadership team is providing true strategic leadership (not merely producing strategic plans). Caret's executive coaching and strategy development work are just two of the ways in which Caret helps senior managers navigate a rapidly changing external environment.

Practical steps forward

• Foster a change in managerial attitudes to encourage more flexibility and broader thinking. Valuing the unique talent-sets of individuals and groups is a useful way of achieving this change. This is an important aspect of the work Caret does with Executives and their teams.
  
• Contemplate the likelihood of the failure of your organisation. (Foster and Kaplan have called this Creative Destruction ). This can stimulate the kind of thinking your hoped-for success requires. For example, senior managers at Dell periodically put themselves in their competitors' shoes and imagine how they might conspire the destruction of Dell. This generates a set of 'critical success factors' that focus priorities and management attention.
  
• Know when to call time on a bad strategy or project. 'Never reinforce failure' goes an old military adage. Doing so can result in disastrous organisational failure.

Oliver Nyumbu, Caret's Chief Executive, helps manage change, and improve organisational effectiveness and business performance.  He has developed effective working relationships with senior teams and executive boards across a wide range of sectors.

For any enquiry please send us an email at enquires@caret.co.uk

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