Part I — In the face of systems & negotiation partners that are frequently adversarial
As a leader, in which circumstances is it preferred to control or empower?
As a leader when faced with a challenge, what’s the approach? Is it preferred to control or empower? To evaluate and solution with a question-like “So how are we going to fix this? what are our options?” Or, is it preferred to explore the problem and tensions the challenge creates to build clarity before solutioning? These are examples of “control” (first) and “empowerment” (second) frames. Neither is right or wrong. However their selected use has implications on how risk is managed.
Sitting with the problem
Using the empowerment frame has the advantage that the team sits with the problem. Critical to team success, empowerment builds a foundation for higher quality solutioning; building clarity that in turn builds team trust and synergy. This can be powerful, enhancing team delivery capacity. However this investment is not always required, therefore in those circumstances, control is preferred as the more efficient lower cost option.
This same dynamic of investing in teams “allowing teams to sit with the problem” has increased weight on the “stage” of organizational processes and teaming level agreements. The choice of teams to sit with issues rather than manage the issue (control) has important implications for the value of teams and in how we manage costs and risk.
Over-stretching use of the control frame rather use of empowerment can create damaging misalignment in key stakeholder interests as well as misaligned risk ownership. These misalignments are a form of “structural risk”, i.e. risk related to how we structure relationships and work. We tend not to identify these within delivery risk. Therefore despite them posing a real threat to delivery, it is unlikely that you would find them in delivery risk logs.
The Risk Dance
The risk dance refers to a specific pattern used to manage risk. The two frames are “control” and “empowerment”.
This post explores when leaders should consider the empowerment frame rather than depend on the control frame.
We explore the impacts of frame selection decisions for a few scenarios: applying power to a challenge; embracing loss and failure to minimize it; engaging teams; and aligning risk on initiatives. We will apply similar analysis to other scenarios in later posts: including the triple constraint (schedules, budgets, and scope); people leadership; planning; governance and technical risk.
Use of Power
Just because you can, doesn’t mean it is in your best interest to.
Protecting your interests through use of power feels like a natural part of positioning for success. It is fairly common for vendors and customers to gain advantage based on their power positions. For example, vendors have informational power which is mitigated (somewhat imperfectly) in a competitive environment. Customers have structural power through control of the buying process and the ultimate ability to make the decision on the relationship. This is also mitigated (somewhat imperfectly) by an open and competitive market. Using power to over-step so your rights and interests are exert to the point they undermine the rights and interests of the other partner is where structural risk is introduced.
When applying power to get our needs met, many falsely assume this is a zero-sum game with more advantage in protection and growth of our own interests at the expensive of the other partner. This perspective underestimates the power of non-zero-sum game where both partners (the team) engaging collaboratively focused on risk reduction and delivering the highest value. i.e. growing the pie. “Sitting with the problem together” empowers the team to work find solutions based on the shared and individual interests. This is a powerful mechanism that many use to enhance delivery capacity and success.
Playing Defense against loss and failure
In today’s hyper-competitive world, avoiding risk and staying in a place of comfort is not an option. A defense strategy is essential against loss and failure.
Risk control is a core tenant of project management. It looks to avoid, transfer, mitigate, and accept minimal risk. Traditional projects will often be broken down into a modular delivery style. This delivers value early and reduces the size of the failure. Control works well within normal bounds of lower risk tolerance levels and if risk ownership is aligned with control. All too frequently, an initiative’s core assumptions are undermined and a major revision/re-write of the project mandate or plan is required. Projects not structured for failure & loss avoidance find it very difficult to adjust. These failures can create major losses most frequently for the customer.
Risk is not something that we traditionally like to embrace and “sit with”. However to win the biggest prizes often we have to take on risks and work through them. For instance instead of delaying any customer gains on function for 2 years while we perform a major technical upgrade, we agree to find a strategy that increases the risk but manages more aggressively. This is trusting and empowering the team to “sit with the risk” and work through it successfully.
As an empowered team, to be able to take on riskier projects “sitting with the problem of higher risk levels”, having an effective approach to minimizing loss and failure is a highly compelling need. Methods like Lean Startup and expressions such as “Fail early, fast and forward” directly face uncertainty, taking on this risk. Playing defense involves minimizing actual and opportunity cost of failure, being aggressive by facing failure head on, discovering failure at the earliest point in the cycle. The best strategies for this are open, iterative, collaborative and empowering.
Joint contribution is essential to creating two-sided delivery agreements that have “accountability, agility and durability”
To run a “fair” competitive proposal process, consistency in the provision of information to vendors is critical. This correctly places the customer in the “tell” communication style and control frame. The challenge is when a contract is established against the triple constraint, with many unknowns (explicit or implicit) and the communication style was in the “tell” mode all the way through. Empowerment where the team (customer and vendors) gets to “sit with the problem together” is likely to produce a better outcome.
Competitive procurement practices result in top-down control of the process. This limits open discussion, the flow of ideas, and the relationship needed to create and maintain strong interest-based negotiation (from the same side of the table). What was missed was “sitting with the problem together”. In running a process to create liability in a competitive environment, we have built-in an assumed certainty regarding the correctness of the need as well as vendor’s interpretation with some but limited validation. These assumptions are built into the contract, and thus creating structural risk for both parties.
Risk’s Locus of Control
“Locus of control” is a measure of a party’s ability to exert influence over a given risk given accountability for its management.
More times than not, transferring risk to partners whom only have partial control over that risk, works only to increase project risk.
Service providers sometimes are eager to win the business play “hero” for their client, taking on “full responsibility”. Some customers have RFPs’ with one-side contract terms that are non-negotiable. The provider to win the business has no choice but accept risks as part of the whole package deal. These strategies in general are not healthy for the success of initiatives, and makes related issues and conflicts more difficult to resolve.
The reality is that the customer still has the risk. It did not move. However the customer now has someone to blame and pursue a conflict with. Sharing the risk in the first place “sitting together with the problem” seems better than a option of a fight later.
Call to Action
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In Part III of this series “Do you find it tough to collaborate?” we plan to explore structural risk further. This time we will cover the triple constraint (schedule, cost & scope), and may cover people leadership; planning; governance and technical risk. (not published). If interested please let me know.
Martin West is founder and neutral advocate for Neutral Advocate. We offer JANA — an online platform for teaming agreements, payments and resolution services. Also support is provided to help leaders implement the team accountability model in support of Agile-Lean practices. To explore more, please sign up at Neutral Advocate.
For the articles, please see Medium publication: “Decentralized Teams”
Not Published: Part III: Structural Risk impacting Schedule, Cost & Quality