Innovation: The Flip Side of Resilience

Author

Jason Bloomberg, Contributor

September 25, 2014

Resilience was a hot topic at last week’s O’Reilly Velocity conference, and the topic was hottest during the keynote and subsequent interview by David Woods, Professor of Cognitive Systems Engineering and Human Systems Integration at The Ohio State University. As an expert in Resilience Engineering, Professor Woods has consulted on catastrophic failures and resilience for organizations ranging from NASA to emergency rooms. For Velocity’s performance engineering audience, his take on engineering adaptive systems to be resilient provided refreshing insight into the complex problems facing technologists today.

My interest in Woods’s talk, however, centered on how his research on adaptive organizations aligned so well with my thoughts on business agility and innovation. In fact, we share the core proposition that organizations are complex adaptive systems – systems that consist of both human and technology subsystems. Furthermore, resilience is a property of such systems – what we call an emergent property.

“Today, failure is due to brittle systems, but we still try to analyze them as if it was a component failure – usually a human,” Woods explains. “‘It was human error!’ No, that’s a component-level analysis missing how a complex and adaptive system behaves.” Such component-level analyses never solve the problems of complex system failures, because the interconnections between the component systems lead to emergent behaviors. “These systems have creeping complexity, and that means there’s more and more interdependencies,” Woods said. “A greater web of interconnections.”

Surprises at the Boundaries

Woods continues his discussion with a definition of brittleness: “Brittleness means that we have a rapid falloff in performance when we’re at the boundaries.” The boundaries he’s referring to are the limits of what the system in question is capable of under normal circumstances. “Any system, any technology, any organization you set up has finite resources and has boundaries,” Woods explains.

For a technology system like a Web application, the boundaries essentially represent how far you can push the system before it reaches its breaking point. When the system is an organization of people, the boundary represents the transition to unexpected, unplanned situations – in other words, surprises.

“What do you do when you face a surprise?” Woods asks, referring to unexpected situations, like when chunks of foam fell off the Space Shuttle Columbia’s fuel tank in an unexpected way. “Do you gracefully extend performance, stretch your capabilities, and add adaptive capacity in order to continue to perform effectively?”

There are two sides to this question. First, the challenge of resilience: how do we avoid failure when we’re surprised by events? But the second challenge is equally important: innovation. “When surprise happens, you need to adapt faster, otherwise…you can’t keep pace,” Woods said. “You can’t make decisions and deploy them to effect fast enough to keep up with change in the world.”

In fact, resilient organizations and innovative organizations share essential core competencies. “Being able to anticipate, being able to proactively learn,” Woods continues. “Proactive learning means you don’t wait for the big signal, the major event to occur that says ‘hey! Learn! Change! Revise everything! A big thing happened!’ Because if you wait for a big thing to happen, it’s usually bad.”

In fact, innovation requires disruption, the “big signal” Woods is referring to, and of course, disruptions are usually surprising. As a result, proactive learning – in other words, planning ahead – is essential for an organization’s innovativeness. So, how do you architect an organization that is both resilient and innovative? You craft “a layered network of human social systems that are able to handle surprise,” explains Woods, “and not get trapped at a narrow level where locally, everyone is behaving in a reasonable, adaptive way, but when you put them all together it’s completely maladaptive from a broader perspective.”

Graceful Extensibility: Adapting beyond the Boundaries

Whether you’re trying to avoid catastrophe or attempting to innovate, it’s essential that your organization can perform well beyond its boundaries, where events are surprising, and existing well-established plans and procedures no longer apply. The missing ingredient according to Woods is graceful extensibility.

“Graceful extensibility,” according to Woods, “is a positive capability to stretch near and beyond boundaries when surprise occurs. We need graceful extensibility as a separate kind of capacity to our normal performances when we’re far from the boundary conditions.” In other words, “extensibility is the ability to continue to perform,” even during periods of disruption.

Perhaps the most important lesson in Woods’s talk was that graceful extensibility – the behaviors that organizations must exhibit to be both resilient and innovative – are the opposite of how management generally expects people to behave when executives seek to optimize business outcomes. This deeply counterintuitive conclusion, that “graceful extensibility trades off with robust optimality,” as Woods puts it, flies in the face of traditional management practice that favors ‘better-faster-cheaper’ behaviors from the organization.

His experience consulting with NASA after the Columbia disaster provides a telling story. “How did [NASA] get brittle?” Woods asks. “By becoming more optimal…. In those days, NASA called it ‘faster-better-cheaper,’ and so that’s the name that stuck. Under the pressure to get more optimal, or faster-better-cheaper pressure, you start seeing all these sources that give you graceful extensibility and sustained adaptability as inefficiencies, and you start to cut them. People who do this get rewarded, because they’re good managers. They’re getting things more productive, they’re turning around things faster. They’re being more efficient. They’re meeting financial goals. They look like they’re doing a great job, but it turns out they’re eroding the basis to be resilient in the face of surprise.”

The Secret Sauce: Sustained Adaptability

When I discuss business agility in my research, I explain the proper goal of Enterprise Architecture is to help organizations move from being less agile to being more agile, with the goal of ongoing, continuous business transformation. Woods’s thinking follows the same lines, referring to the agility necessary for such ongoing transformation as sustained adaptability.

“Sustained adaptability goes further [than graceful extensibility],” according to Woods. “Not just that you can work out how you handle the surprises you deal with today, but that you can continue to evolve and deal with future kinds of surprises.” In fact, Woods’s use of the word evolve here is intentional, as he emphasizes that evolution of species due to natural selection is a classic example of sustained adaptability of a complex adaptive system.

However, as with my research, Woods focuses on how human organizations can successfully sustain adaptability. “If we only pursue faster-better-cheaper pressure – if we only try to optimize, even with a bit of robustness thrown in, we will end up inadvertently eating the key resources that build graceful extensibility and sustain our adaptive capacities in the face of change, future challenges and new opportunities,” Woods says. “We will undercut our very capability and reason why we produce florescence.”

Woods’s use of the term florescence – the act of flowering – is an odd choice here. From my perspective, a better word would have been innovativeness. He didn’t speak much about florescence (or innovativeness, for that matter) at Velocity, as resilience was a more central topic for the conference, but it’s a core theme to his research.

How then do organizations achieve sustainable adaptability – in furtherance of resilience, florescence, or innovativeness? They need “a tangible sense of precariousness,” according to Woods. “No matter how good we have done before, no matter how successful we’ve been, the future could be different, and we might not be well adapted. We might be precarious and fragile in the face of that new future.”

Precariousness suggests a paradoxical expectation of surprise. Yes, surprises are by definition unexpected, but in order to be innovative, you are looking for and expecting to be surprised. Clearly, remaining in such a state of anticipation is precarious. “One of the advantages in the Internet world is that sense of precariousness, and that surprise can happen no matter how successful you’ve been in the past. The next big thing may change everything.”

The Human in the System

Regardless of the level of technology in an organization, the key to sustainable adaptability always comes down to talented people. “Yes, automation will be part of our solutions,” Woods says, “but we don’t get to solutions by just pursuing automation; we get there by giving people the initiative to manage those resources effectively as situations change.”

In fact, he speaks directly to the audience: “You are part of florescence: you are a part of adaptive networks that grow in new ways that trigger change.” People are always the adaptive glue between relatively inflexible technology systems, “a generic source of adaptive capacity” that provide the initiative at the heart of resilience and innovation, according to Woods.

“It’s actually initiative, pushing initiative and decentralizing it to the point of action so that you can keep pace with the world, and coordinating that local initiative so that you can meet the broader goals,” Woods believes. “So that you can be locally adaptive and globally adaptive, and that takes human talent empowered in the right way.” Thus Woods leaves managers with a final admonition: sustained adaptability – and with it, business agility – depend upon managers pushing initiative down into the organization, empowering people in the proper manner. In other words, null .

Image credit: O’Reilly Conferences

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