What different environments have in common from a leadership support perspective

In our work, we move between different environments. We work sometimes in development organizations, and on other days as advisers to business people. We move between assisting the Dean of a University to assisting a value chain practitioner in an NGO. Sometimes we help a policy maker, other days a team leader working in a rural location. We work with a diverse range of economic activity, from informal trading to retail, from home industries to advanced manufacturing, from agriculture to finance, local industries to international value chains. People ask us how we do this, what kind of expertise one must have to advise such different clients in such a wide range of industries.

The answer is actually quite simple. We are not engineers, nor are we knowledge workers for rent. We understand how to design processes of exploration and change; how to help people in systems recognize or become more sensitive to patterns and to then we assist them to carefully shape or influence those patterns. We have learned that a complex system does not become simpler by studying it. We also know that what people say they think and how they actually behave in the moment are not always consistent. Complex systems can only be understood by trying something to improve it and then carefully observing how the patterns change, typically through some low risk experiments or probes. These experiments must be done in a reversible way as far as possible, and should also try many different approaches to improving a particular situation. That means that without calling it that, we help organizations of all kinds to learn by doing. Most organizations simply pay lip service to this idea.

What decision makers in businesses, governments and development organizations all have in common is that they are trapped by long term visions of an ideal future state, trapped on narrow paths of the ideal way to reach their objectives. Planning instruments that work well within an engineering management environment have been applied to the management of organizations, of networks and of people. Many managers are frustrated because projects don’t go as planned, especially when it comes to collaborating with other competitors, counterparts, customers and supporters Their views of what is possible and acceptable behavior is often confined by ideology, organizational culture and inertia. Everything seems to be shaped or influenced by everything, and the consequences of making a wrong decision could undo the hard work of getting many other things in order through hard work. We have witnessed how in the last few years increasing numbers of leaders we work with have become despondent, risk averse and frustrated by instructions from above and demands from the outside.

Our job is often to be a management coach or adviser. It starts with listening to a leader’s description of their current challenges and the issues that they are frustrated by. We listen to what they are struggling with, what they are trying, and more importantly, why. These existing ideas and actions we capture as hypotheses that describe the boundaries of a system from the perspective of the leader. We help them to capture some of the data and some of the patterns that appear to be constant, but this is often not the real value add. Our real value add is when we help these leaders to design portfolios of carefully designed experiments that are implemented simultaneously to test what is possible within a particular context. The purpose of the experiments is to not only “solve problems”, but to intensify learning and adjustment of the organizations. We help leaders and their teams sense better what is possible, what is within reach, and what is not possible within current constraints. This strengthens the resilience and the collaborative culture of the organizations that these leaders are responsible for. Often it results in strength through diversity, which is healthy for organizations, as opposed to strength through alignment, which only ever can be healthy for a short period until the context changes.
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Is target sector selection a good place to start

In much of private sector development, the selection of a particular economic sector or sub sector happens quite early in the development process. Typically a sub sector is selected either for its potential in terms of job creation, exports or some other criteria. These indicators are sometimes informed by some preliminary research, other times by careful statistical analysis.

Approaches such as market development (a.k.a Making markets work for the poor) often assume that if a market that is important to a particular sub sector can be improved, then the society (and of course the sub-sector) will benefit. This logic ignores that a market is deeply embedded in a social context, what Mark Granovetter called social embeddedness. Furthermore, market failures tend to be interconnected as markets are interdependent. Thus the chances that a market is failing for a particular good or services in isolation of many other markets is slim. Market development is an evolutionary process that requires the co evolution of product and service markets as well as market supporting organizations and systems (markets are about far more than supply and demand, unless you are a traditional economist). This evolution is enabled or hampered by the presence of social institutions like trust, habits, value as well as formal and informal organizations that provides market guidance, regulations that reduce transaction cost (for instance by providing quality assurance).

The chances that a particular sub sector and its supporting markets, say for instance dairy farming with its small farmer network that is connected to a retail market, will evolve as an exemplary island in a sea of chaos (as in disorder, randomness, inconsistent behavior, low trust and fragmented efforts to improve the system) is highly unlikely.

In these instances, a sectoral or sub-sectoral approach is futile. Of course, it could be argued that working with a particular sub sector reveals something about the society, an argument that we cannot disagree with. However, most development programmes are measured at the micro level (in other words at the level of the actors in a particular sub sector) rather than on the improvement of the overall system conditions which includes adequate or responsive domestic market supporting organizations and supporting social institutions.

If you really want to support faster change in a developing country, perhaps a more promising place to start is with the actors that are behaving differently from the rest. This is a very qualitative or subjective assessment, but with this group of outliers it may just be possible to prove that a different kind of behavior is profitable (or effective), and that the boundaries created by culture, habits and routines may need to be adjusted.