Hard Times Bring Malicious Obedience [When We Really Need Business Agility]

What do companies get when people follow orders to the letter whether those orders make any sense or not? Situations change fast so orders and decisions from last week or last month may not be appropriate today, but common sense won’t help in times like these. People are afraid of getting fired and everybody is trying to avoid blame so they do as they were told even if it actually causes harm. That’s called malicious obedience.

Malicious obedience is a characteristic of the traditional business model. In that model a handful of senior executives at the top of the organization does the thinking and everybody else does as they’re told – or else. That model worked well enough when things didn’t change so fast and there was more time for senior management to figure out what was going on and decide what to do about it. But in times like these there are too many decisions to make and they need to be made quickly. No small group of executives (no matter how smart, or how tough, or how many computer systems they have) can keep up. It's a problem all big companies have to deal with.

[ I do lively presentations on this and related topics - mhugos@yahoo.com ]
 
If you’re a manager in a traditional company you pass the boss’s orders down the chain of command and that’s that. It’s not that you don’t care about your company and it’s not that you can’t think for yourself; it’s just that if you think for yourself and do something different the risks far outweigh the benefits, so you obey – even if it’s bad for the company.

Companies need to be agile if they are going to successfully navigate unpredictable economic and market turbulence. They need everybody thinking and acting in ways that benefit the company. Some people might say that getting everybody involved sounds like a recipe for chaos. Some people might say in times like these the best way is for everyone to follow the orders of a few leaders (and hope those leaders know what’s best).

Yet there’s evidence this traditional notion is now out of date. Let’s look at a couple of companies doing well in markets that traditional wisdom says can’t do well in this economy. One is a manufacturer of networking equipment and the other is a retailer of consumer electronics. Both companies have been steadily evolving a new type of business organization model for the last five or six years. The manufacturer is Cisco Systems. The retailer is Best Buy. Both of these companies are becoming responsive and agile.

Lessons from Companies Blazing a New Path

A statement on the Cisco website under the tab “Business Agility” says this,“We know you need to be responsive in order to best serve the business, but often organizations like yours are increasingly challenged by outdated infrastructure and processes. To respond more quickly to changing business needs, companies need to evolve their IT operations, their data center infrastructure, and even their organizational model.”

That last point, the one that says “…even their organization model”, is the most important point. Cisco has made big changes in their organization model. They have decentralized decision making that used to be done by 10 execs at the top and pushed it out to some 500 business unit managers who are close to the scene of the action and who now figure out for themselves how to get things done (no room for malicious obedience here).

Business agility starts first with an overhaul of

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