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S2E1: Dark Side | Trust is good, control is better

Published by Kasia Sanchez
June 01, 2021 @ 9:00 AM

This article was written by Michał Paprocki, CTO at Euroclear with more than 17 years of experience in creating and managing IT centres as well as transforming financial companies into digital business models. Michał is recognised for leading successful agile transformations, for bringing a friendly ease to complexity and for his eagerness to challenge the status quo with out-of-the-galaxy thinking.

The previous series of posts defined the Jedi leadership that was inspired by the Star Wars saga and showed a manager that aspires to be good. We learned about the desired leadership traits and the ability to withstand the seduction of the Dark Side. However, the world is not that rosy and we are quite often under pressure. The pressure to fix issues, deliver projects, obtain results, satisfy shareholders or reach personal ambitions. As such, being in control is a virtue that can not be really questioned. In the world where black swans fly in herds, it is tempting to break bad or rather be seduced by the dark side and micro-manage based on the principle “whatever it takes”. Isn’t it?

The control maniac

Elon Musk, the owner of Tesla and SpaceX amongst others, is famously cited to state with pride that he does not really micro-manage as leadership style, but boasts himself to be a nano-manager. This behaviour means that he does not take anything that is not perfect and pushes many of the people that work for him into burnout. Such “my way or highway” approach is surely effective early on to launch new products and create market innovations, but one may wonder about externalities it creates and the ability of such businesses to last long and bring value to the society. The drive of Elon is respected with envy around the world, but apart from ethical considerations there is a growing risk to his business model. Is the culture of fear and tunnel-vision able to withstand the advent of new players (mostly Chinese, but not exclusively) as well as changing customer lifestyles? Perhaps instead of vision to conquer Mars, it is better to focus on how to take care of the current planet.

Google is another widely admired company that lets its shareholders earn fortunes thanks to its ever growing value over twenty years. Its slogan “Don’t be evil” served as a magnet to bring talent of mission-driven individuals that together created truly marvellous products. It used to be the Silicon’s Valley symbol of positive rebellion against the establishment and source of freedom for the users worldwide. Its value proposition to bring mankind’s body of knowledge to all individuals is a noble cause. However business models driven by free services inevitably mean that the customer becomes a product itself without even realising this. “I give you data so that you control reality” company is sliding into the dark depths of “I have your data so I control you”. If you google Google these days you will see stories of fines, anti-trust schemes, privacy violations and other litigations. So looks like Google is in control of you, but does it control its own destiny and will not end up being split like Standard Oil a century ago?

Remember the moments where you grow impatient, maybe moan about the slow performance of your colleagues or experience a large project going south and decide to step in to be “back in control”. You go “God mode”, make all decisions, push your way forward, send dozens of emails with clear instructions, call meetings on wee hours and become “The Hero of the Day” by saving the firm once again. Can an organisation be in control if it desperately relies on few individuals?

The cowboy syndrome

The opposite end is ignorance of control systems and instead acting recklessly to pursue egoistic targets. Such was the approach of Enron and its auditor Arthur Anderson that led to the famous bankruptcy of 60bn+ enterprise back in 2001. The very similar mindset of the entire industry brought us the financial crisis of 2008 with Lehman Brothers making its infamous last headlines. In an amazing movie “Margin call” you can see Kevin Spacey, Demi Moore or Jeremy Irons illustrating how uncontrolled greed can wreak havoc on society. It is not only Naomi Klein or Thomas Piketty being lonely wolves crying for a more sustainable version of capitalism. One where society is back in control and cowboys are punished for their misdeeds. 

Many people are afraid of flying and plane crashes are drawing mass media attention by creating the impression that likelihood is as high as its impact and overall aviation is associated with excessive risk. So are you better off not flying and “in control” when choosing the ground transport? Not really. Statistics clearly show that the average American has a 1:11.000.000 chance of being killed in aircraft catastrophe as compared to 1:5000 in car crash. What is even more interesting is that approx. 80% of plane crashes are attributed to a human error (source: ICAO). Think about Air France flight 447, where pilots could not rely on autopilot and despite a perfectly safe situation went into panic mode and effectively brought the plane into the Atlantic Ocean. Or the 2010 Smolensk air crash of the Polish flight with the President and 95 senior officials onboard caused by serious and numerous violations of safety principles. In these cases lack of control literally kills.

Another irresponsible behaviour is one that led to one of the greatest industrial disasters of Deepwater Horizon oil spill in The Gulf of Mexico. The post mortem investigations showed numerous reckless behaviours related to lack of control as a result of cost cutting and violations of regulations (e.g. defective cement construction). BP corporation was even charged with lying to the Congress and resulting USD 18,7bn fine is the largest corporate settlement so far.

Most large enterprises embed a layered control system, where the acting of delivery functions (IT, product, sales, production, finance) or so called 1st LoD (line of defence) is controlled by professional risk management (2nd LoD) and then have independent oversight of internal audit (3rd LoD). All three lines usually use standards and probability to model likely risks and ensure proper mitigations, but recently increasingly move into analysis of extreme-but-plausible-scenarios (EbpS). As per various books of Nassim Taleb (e.g. The Black Swan, Antifragile), we are exposed to many tail risks that by nature are highly unlikely, but their impact is significant. Think about this week’s complete blockage of The Suez Canal by wrong manoeuvres of one cargo ship that costs the global economy some 10bn per day, impacting 10% of world trade and putting 300+ large vessels into an enormous queue.

As leaders we are prone to overestimate our skills that left unchecked could be even worse than the perils of micro-management. Think about yourself being in hurry and making judgement calls to cut corners, evade the bureaucratic processes or outsmarting the industry that “did not get it”.

Control is a function of clarity and competence

We learned about extreme strategies towards control. One of nano-management that relies on leaders / systems that exercises power and influence over many by bending their reality. Another one of people / system’s lack of control that generates damage to many. These are the behaviours of the Dark Side and luckily there is another way. You just need to change your thinking about control as did Captain Marquet of the US Navy and described in his book “Turn The Ship Around!”.

I love the concept that Control consists of Clarity and Competence. It was my eye-opener last year and if you think about it, the concept makes all the sense.

Let us first deal with clarity. 

A study of HR consultancy Watson Wyatt of 14.000 employees across Europe showed that leaders who give their subordinates “a clear line of sight” when it comes to vision and direction tend to have a much more committed, engaged and productive workforce. The clarity is not only around the big picture and dot on the horizon, but shall be translated down the line in the form of explicit objectives, principles and processes. 

There is however a pitfall one shall avoid and it is to over-rely on detailed processes and excessive controls. It is often the case that organisations follow processes “on autopilot” and without much reflection that the reason the process is there may no longer exist. This risk is the greater, the larger and the more successful the organisation was so far. Good way to ensure clarity is to define acceptance criteria in relation to work outcome (yes, the very agile notion of “definition of done”), have clear quality parameters and key performance / risk indicators (KPIs / KRIs) and define norms and standard (e.g. architecture blueprints, safety manuals, process cookbooks). One of the common approaches is to adopt industry standards so that the organisation does not re-invent the wheel or become overzealous. 

A popular slogan goes that we entered the XXI century with the worldwide war for talent / competence. The organisations are outbidding themselves in the quest of employee centricity. Everyone seems to recruit and retain superb troops that are ultra smart, super engaged and … extremely knowledgeable. 

Like in the case of the best football teams, it is a combination of individual competence and collective wisdom of the entire team that make them successful. So yes, leaders should spend ample time to recruit the needed talents and have in-depth ability to spot them. Again the more established organisations are, the more entrenched they become so fresh blood is critical to ensure flexibility and creativity. However, it is even more crucial to constantly up-skill and train the existing population to stay relevant. Some sensible practices here could be allocating excessive resources to professional training, learning new technologies, creating safety conditions to experiment / innovate or enforce professional certifications. 

Captain Marquet had a system that instead of asking for approval, the crew was encouraged to use “I intend to” and explain the reasoning, risk assurance and the proposed action. In case the action was well-thought-of the consent was nearly automatic. That proved to be a very powerful way to increase the competence of employees. So gone is the situation that one could hide behind the process or escalate decision-making to his superior. 

Modern sense of control is when a leader succeeds in explaining the vision and desired state to the employees that are grown to be competent enough to execute it. So trust is good, but clarity and competence is better.


Stay tuned for the next episode of the Dark Side of the Force and make sure you check each of the Season 1 of Michał Paprocki’s Jedi Leadership series in our app:

I – Can Star Wars help leaders deal with coronavirus crisis?

II – Search within and mission find you will

III – It’s more than just the company

IV – You have to unlearn what you have learned

V – A Jedi uses the force for knowledge and defence, never for attack

VI – Remember. Your focus determines your reality

VII - We are what they grow beyond


This article was originally published by Michał Paprocki on LinkedIn.


 

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