Chapter 1
I have a favorite lapel pin I acquired at some conference or other years ago. Itâs a red speech bubble that says in big white letters âI SPEAK FLOODââa way of communicating to others the wearer has something to say about Americaâs costliest natural peril.
The choice of wording, analogizing knowledge of flooding to a language, is meant to be humorous. There is also a core of truth to this metaphor, though: flooding events and the workings of the government programs designed to deal with it are exceptionally complex and jargon filled. When people who work in this area talk amongst themselves, it can very easily sound like a foreign language to an outsider.
It generally takes people years to get to the point where they feel confident saying that they can in fact âspeak floodâ conversationally, if not yet fluently. One of the reasons for its complexity is that flooding is all about uncertainty.
Will this bit of Earth be inundated with water? If the answer is always yes, then thatâs not floodingâthatâs just where the river, lake, or ocean happens to be. Color it blue on the map and call it a day.
But if the answer is usually no, then there is some risk that it will end up covered with water, posing a problem for whatever we humans mightâve chosen to put there. That risk, that uncertainty, forces us to engage in all sorts of complicated cost-benefit calculations about what we can or should place in a given area and how we might protect it.
The stakes of all this can be quite high, as is evident to anyone who remembers Hurricane Katrina or is attuned to our current debates about the tradeoffs involved in mitigating climate change. Play the odds wrongâwhich we do, to the tune of billions of dollars every single yearâand you can very easily have a crisis on your hands.
In fact, uncertainty is often at its highest and most painful during times of crisis. Many organizationsâ reputations are made or broken by how they respond under exigent circumstances. Many believe such situations are the truest tests of institutional capability and leadership character.
That is precisely why, as we look around and see crises in every direction, there is a widespread feeling that our institutions are in some way fundamentally broken and incapable of successfully dealing with the world in all of its contemporary uncertainty.
Culture Reveals Itself in Times of Crisis
Given the highâsometimes even existentialâstakes involved, looking at how organizations have dealt with dire and volatile situations is a logical starting point for exploring how organizations can manage uncertainty.
Looking at the various case studies out there, which by any standard are all over the place and range from heroic to catastrophic, an obvious question presents itself: why do similarly situated organizations, when faced with comparable circumstances, react differently?
One example comes from the world of rubber tire manufacturing. Why did Goodyear respond successfully to the introduction of radial tires, while Firestone sputtered and went from market leader to a discount aisle acquisition snapped up by Bridgestone on the cheap?
Another example is from the kitchen appliance sector in South Korea. When their rice cookers began blowing up in homes across the country, why did LG start out by stonewalling, only to move to full-fledged repentance? By comparison, Samsung and Cuckooâwhose cookers also suffered from the occasional spontaneous eruptionâremained consistent in their respective stances, the former offering lukewarm excuses while the latter forcefully denied responsibility. What explains these divergent behaviors?
A final corporate example comes by way of a crisis that afflicted the laptop market a few years ago. When their laptop batteries started blowing up, why did Dell walk a middle ground between advocacy and accommodation, while HP stuck to their guns the entire time? Gateway, meanwhile, did a 180-degree pivot from total denial to abject apology.
Disparate institutional responses outside of the private sector are even more plentiful. Just compare how different governments have responded to the COVID-19 pandemic, or climate change, or any number of other global challenges.
The reasons underlying these variations are surely as complex as the institutions themselves. Before we dive into how foresight can specifically help organizations manage uncertainty, itâs useful to take a step back and look at how organizations operate more generally. One variable in particular, for which researchers have found credible evidence, is organizational culture.
âCulture eats strategy for lunchâ goes the catchphrase attributed to Peter Drucker, probably the most famous business intellectual of the twentieth century. Organizational culture is one of the most studied, promoted, and debated topics in the professional world today. Judging by the number of books, videos, and consulting firms dedicated to the topic, lots of people agree and want to better understand what it is and how they can improve it within their own organizations.
There is a major definition problem here, though. To quote IMD Business School professor Michael D. Watkins:
âWhile there is universal agreement that (1) [organizational culture] exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change.â
This definitional challenge is inherited from the broader concept of culture in general. While the âorganizationalâ part meets with general agreement and shared understanding, the âcultureâ piece proves elusive.
Assessing how we think about that term in the pages of The New Yorker, Joshua Rothman looked at the many possible meanings and concluded, âThe problem is that âcultureâ is more than the sum of its definitions. If anything, its value as a word depends on the tension between them.â In other words, the concept of culture is every bit as malleable, ephemeral, and occasionally self-contradictory as the people who animate it.
That sounds like organizational culture in a nutshell, alright: intangible but valuable, if only because the alternative is unthinkable. An absence of culture would mean an absence of humanity, without which there would be no organization at all. People are culture-carrying particles, propagating culture like photons propagate an electromagnetic field.
Culture Is Conversation
Given so many plausible and potentially useful ways of thinking about organizational culture, what might be one that is particularly well suited to todayâs world? Modern institutions must function in a context of unprecedented, accelerating technological development, knowledge creation, and global interaction. Cultures of all kinds are themselves evolving ever more rapidly. Keeping it all organized in a way that is both usable and not overly simplistic is a real challenge.
One promising school of thought for making sense of it all goes by the name âorganizational discourse.â According to this view, the culture of an organization is defined by the ongoing âconversationsâ between everyone in the organization.
These are not oral conversations for the most part, but exchanges of information through various means, verbal and nonverbal. The interplay of these conversations and the meaning they create in the minds of individuals make up the cul...