Why Organizational Agility Is Key To Defeating The Coronavirus

Why is the U.S. failing to cope with the coronavirus crisis? New U.S. infections continue to grow exponentially. Relative to other developed countries, such as South Korea and even Italy, U.S. performance to date has been poor.

So why is a country that won two world wars, that put a man on the moon, that owns the most technologically advanced economy, that has the world’s best universities, that rapidly developed a vaccine against polio, is unable to implement the most obviously needed actions needed to mitigate the coronavirus pandemic? Why is the world’s foremost public health authority—the CDC—seemingly unable to execute the most elementary actions to protect public health and safety? Why can’t the biggest and most sophisticated industrial country manufacture desperately needed medical equipment and supplies in a timely fashion? Why do we see, not just the missteps of single individuals, but rather managerial and leadership breakdowns across an array of institutions and sectors?

Historians will eventually present comprehensive answers to these questions. But the more urgent issue is: what to do now? The issue is critical, because we have so far been dealing with the easy phase of the coronavirus crisis with a relatively simple set of well-understood measures: stay at home, test and isolate, and equip hospitals.

The issues involved in putting the economy and society back together again will be much more difficult. They will involve an interconnected set of biological, economic, financial, managerial, leadership, social and moral questions of unprecedented scope and complexity.

Even if the disease eventually appears to be coming under control—a result that is still months away—how long will it take before people are comfortable in emerging from the current regimen of medical terror where death is said to lurk on any hard surface? How long before people are ready to go to bars, restaurants, cinemas, take the train or the plane to go skiing or visit a tourist destination? How long will it take before citizens are willing to risk what’s left of their savings? How long will it take for firms to get back in business, let alone be willing to invest? How soon will entrepreneurs who became collateral damage in the crisis be ready to try again, if ever? In this setting, the probability that the consumer-driven U.S. economy will come roaring back any time soon is low.

Given the difficulty of detecting the presence of the disease, premature steps to “get back to normal” risk backfiring and generating a dangerous second wave of outbreaks, as some of the more successful Asian countries are finding. People, institutions and markets are still not fully grasping that this crisis and its aftermath could go on for years, not just weeks or months, and scar an entire generation, if it is not adequately handled.

Adequately handling the crisis will take more than replacing a few individuals. It means swiftly putting in place more agile institutional arrangements. This, in turn, requires a deeper understanding of why our current institutions are failing. It means grasping the three basic types of organization: rule-driven bureaucracies, boss-driven outfits, and mission-driven organizations.

1.     Rule-based Organizations: Bureaucracy

Most 20^th Century organizations were rule-based organizations, aka bureaucracies. As Gary Hamel has explained:  In such organizations, “strategy gets set at the top. Power trickles down. Big leaders appoint little leaders. Individuals compete for promotion. Compensation correlates with rank. Tasks are assigned. Managers assess performance. Rules tightly circumscribe discretion.”

Bureaucracy, says Hamel, has constituted “the operating system for virtually every large-scale organization on the planet.” Bureaucracy is “simple, and scalable.” In stable contexts, bureaucracies can be valuable, provided that the mission doesn’t shift.

Within bureaucracies, one also finds mission-driven individuals, who get things done, even when the rules don’t fit a new situation. Such individuals were on vivid display at the recent impeachment hearings with Ambassadors William Taylor and Marie Yovanovitch. They got things done within and despite the rules.

Yet bureaucracy is a profound liability in the increasingly volatile, uncertain, complex, and ambiguous world of the 21^st Century—the so-called VUCA world, of which the coronavirus crisis is the latest and most dangerous instance. Bureaucracy “underweights new thinking and …perpetuates the past. It misallocates power... It discourages dissent and breeds sycophants.”

The failings of bureaucracy have, for instance, been on vivid display in CDC’s ongoing failure to put in place a testing regime that would enable the nation to know where the infected individuals are located so that they can be isolated. Testing on the scale needed is still not available. Without such testing, the nation is flying blind, and will be forced to maintain large-scale lockdowns unless and until treatments or vaccines are discovered.

2.     Boss-Driven Outfits

The second organizational model comprises boss-driven outfits. These are organizations that are run by single individuals, who are often brilliant, charismatic, narcissistic and passionate. When successful, they require or inspire total loyalty to their vision, even if this vision shifts abruptly. The organization does what the boss wants, whether staff think it makes sense or not.

Boss-driven outfits are often found in startups, family firms, the mafia, gangster organizations, and autocratic governments. If the boss is sufficiently brilliant, like Steve Jobs, the outfit can be extraordinarily successful, even if the boss can be hard to replace.

The Trump Organization is an example of a boss-driven organization in the private sector. It is a group of about 500 business entities of which Donald Trump is the sole or principal owner. The Trump Organization has or had interests in a wide variety of businesses, including real estate development, investing, brokerage, sales and marketing, property management, hotels, resorts, and golf courses. Many of these businesses went bankrupt but the firm pressed ahead regardless.

In personnel terms, the Trump Organization has had only a small staff, including family members, all of whom are required to be totally loyal to whatever Donald Trump decides. It has operated for many years with the help of a “fixer”, which for many years was Michael Cohen, who implemented and enforced Donald Trump’s decisions, and who is now in prison for his conviction in August 2018, on eight counts including campaign finance violations, tax fraud, and bank fraud.

As U.S. president, Donald Trump has sought to introduce the boss-driven model of organization into the functioning of the White House. Here, fierce loyalty to Donald Trump, his interests, decisions and whims is the primary performance requirement for any staff member. Frequent public praise of his performance is a second requirement. Given the difficulty of reconciling these requirements with the substantive needs of the jobs that individuals formally hold in the federal government, the White House under Trump has become a revolving door as appointees come and go. The president has run through four chiefs of staff in just three years.

Responsibility for dealing with the coronavirus has also been a shifting responsibility, including at various times, his chief of staff (Mick Mulvaney) , the Secretary of Health and Human Services (Alex M. Azar), the Vice President (Mike Pence), and now possibly his son-in-law, (Jared Kushner). There currently appear to be several competing power centers in the White House, including medical experts like Dr. Anthony Fauci and Dr. Deborah L. Birx, who all struggle to have their voice heard by the single decision-maker.

If President Trump’s wishes and decisions were clear and consistent, the boss-driven model of running the White House would in any event have been an uncomfortable fit with the federal bureaucracy. That’s because the imposition of personal loyalty tests in a bureaucracy tends to make bureaucrats even more cautious and resistant to taking initiative.. The fate of mission-driven individuals such as Intelligence Community Inspector General Michael Atkinson, who was fired last Friday, typifies the issue.

Yet President Trump’s wishes and decisions have been anything but clear and consistent, particularly in the case of handling the coronavirus pandemic. The result is that the federal bureaucracy has looked flat-footed and incompetent at every turn, even though the individuals involved may be highly skilled and committed.

3.     Agile Mission-Driven Organizations

Over the last two decades, a third model of organization has become steadily more important as the world becomes more volatile, uncertain, complex, and ambiguous. This model of organization enables the organization to shift direction in the light of rapidly changing or unexpected circumstances. Agility may be present either at the level of organizational strategy (strategic agility) or at the level of operations (operational agility) or both.

In the private sector today, firms’ mission is necessarily “adding value to customers”, given the shift in power in recent years from producers to consumers. The largest and fastest growing firms on the planet—including Amazon, Apple, Facebook and Google—all exhibit in various ways this customer-obsessed agility. In the private sector, Agile organizations are eating the world, and putting the old bureaucracies out of business. In 2018, surveys by Deloitte and McKinsey showed that more than 90% of CEOs aspire to business agility, even though less than 10% had actually accomplished that.

In the public sector, bureaucracy is still the dominant model, even though there have been islands of agility throughout the federal government, such as the extraordinary performance of the  Defense Advanced Research Projects Agency (DARPA)—the agency of the United States Department of Defense which provided significant technologies that influenced many non-military fields, such as computer networking and the basis for the Internet.

A Public Sector Example Of Organizational Agility

In the federal government’s handling of the coronavirus crisis, organizational agility has been most noticeable by its absence. Instead, the rigidities of the bureaucracies at CDC, FEMA and HHS, the lack of coordination between them and the zigs and zags of the boss-driven Trump White House have combined to produce a poor performance in handling the coronavirus crisis.

Developing institutional agility throughout an organization normally takes a number of years. Yet there are also examples of a very rapid shift towards organizational agility in the public sector with striking success, such as the 2003 Task Force in Iraq, led by General Stanley McChrystal. Prior to its work in Iraq, the Task Force was arguably the world’s most sophisticated fighting machine. It had abundant resources and advanced technology. It was facing a poorly-resourced and ill-educated bunch of extremists. Yet it was losing.

At first, McChrystal couldn’t understand how such a poorly organized bunch of misfits could be defeating the world’s finest fighting force. It took him time to figure out the problem with his awesome military machine: the Task Force itself was a machine, while the enemy was operating as a flexible network. And in a turbulent environment with instant and pervasive communications, a machine, even a big, sophisticated, well-funded machine, is no match for a network. The bureaucratic decision-making apparatus of the Task Force prevented it from moving fast enough.

“In the time it took to move a plan from creation to approval,” writes McChrystal, “the battlefield for which the plan had been devised had changed. By the time it could be implemented, the plan—however ingenious in its initial design—was often irrelevant. We could not predict where the enemy would strike, and we could not respond fast enough when they did.”

McChrystal saw that the problem wasn’t collaboration within the teams themselves, but rather collaboration between the teams. The teams “had very provincial definitions of purpose: completing a mission or finishing intel analysis, rather than defeating [the enemy]. To each unit, the piece of the war that really mattered was the piece inside their box on the org chart; they were fighting their own fights in their own silos. The specialization that allowed for breathtaking efficiency became a liability in the face of the unpredictability of the real world.”

Communications, says McChrystal, were “even worse between the Task Force and our partner organizations: the CIA, FBI, NSA, and conventional military units with whom we had to coordinate operations.”

The challenge was to achieve trust and purpose in a large group of teams and agencies without creating chaos. McChrystal could see that he had to eliminate “the deeply rooted system of secrecy, clearances, and interforce rivalries.” He had to reverse the principle of limiting information on a “need to know” basis to one where “everyone knows everything”, so that “every man and woman in our command understood his or her role within the complex system that represented all of our undertakings. Everyone needed to be intimately familiar with every branch of the organization, and personally invested in the outcome.”

He could see that the ability to adapt to complexity and continuous unpredictable change was more important than carefully prepared plans. Rapid horizontal communications were more important than vertical consultations and approvals. Individual team excellence was not enough: collaboration among teams was vital to achieve overall group performance. Teams had to be able to take decisions as needed, without seeking approvals higher up the command. Big Data would never offer respite from the unrelenting need for continuous adaptability.

McChrystal’s approach was to create a Team of Teams. This meant turning the Task Force from a bureaucracy into an organizational network, i.e. a set of teams that interact and collaborate with other teams with the same connectivity, interaction and passion as they do within their own small team.

Four Principles Of Organizational Agility

Four key principles for organizing an effective agile network are these:

1. The network has a compelling goal: Traditional managers are correct in thinking that a network will never work in a bureaucracy. That’s because work in a bureaucracy is dominated by rules, procedures and instructions. To function effectively, a network must be driven by a compelling shared goal. Once that obsession is universally shared, it matters less who is delivering the value. What’s important that the fact of delivery. As in a basketball team, it’s less important who scores the goal: what matters is whether the goal is scored.
2. The network comprises small groups. These large networks are not built on a collection of individuals, like the old-style evangelists bringing huge crowds together in a big tent. “Successful movements,” says John Hagel, the director of Deloitte’s Center for the Edge, “are all organized around small, local action groups, who work together to achieve impact in very different contexts. These action groups are united by a loosely coupled network that enables them to seek help from others and to observe and learn from the diverse actions of each group what actions can achieve the greatest impact.”
3. The groups have an action orientation: Small groups cultivate a spirit of collaboration, but it is a particular kind of collaboration. These groups are not about years of discussion, study, meditation or reflection. They are about putting ideas into practice, not about abstract knowledge, or even on ideas for the sake of ideas themselves. These groups are about changing the world in a direction that the participants think is better in an important way.
4. The network is the sum of the small groups. The network doesn’t contain the small groups: it is the sum of the small groups. The small groups are not groups within the organization: conceptually, they are the organization.

An Agile Response To The Coronavirus

America’s response to the coronavirus is just beginning. It has already messed up the easy part. Now comes the hard part. Even when we are through the task of bringing the virus under control in most of the country and have adequately equipped our hospitals, putting the economy and society back together again will be more difficult. It will involve an interconnected set of biological, economic, financial, managerial, leadership, social and moral issues of unprecedented scope and complexity.

Unless the federal government rapidly develops greater organizational agility of the kind demonstrated by General McChrystal, it will fail even more badly. Agility will also be needed to help mobilize the private sector to come up with the ultimate solution: an effective treatment or vaccine.

And read also:

Why The Coronavirus Strategy Must Change

How Lack Of A Strategy Undermines The Coronavirus Response