A633.6.4.RB_CliffordMarc

Reversing the Circle

“Leaders get the followers they deserve.  Followers get the leaders they deserve” (Obolensky, 2016).  As organizational leaders develop strategy it is important to consider how both upward and downward leadership influence each department and each employee.  The strategy that an organization adopts depends quite heavily on each employee and their individual willingness and ability to perform their job functions independently.  Followership is an individual’s ability and willingness to follow a leader.

Obolensky (2016) described five levels of followership:

1. Wait to be told
2. Ask to be told
3. Seek approval for a recommendation
4. Seek approval for action undertaken
5. Get on and inform in a routine way

A certain level of interdependence or codependency exists with every leader/follower relationship.  An employee’s behavior depends heavily on, and is influenced by the leader’s behavior.  “To consider . . . ‘Level 5 followership’ in isolation to leadership behavior would be a serious omission as the one will, to some extent drive the other, and vice versa” (Obolensky, 2016).  The confidence that a follower demonstrates can influence the trust that a leader places in him.  If a follower shows low confidence in his own skill, a leader may struggle to place trust in him.  Obolensky (2016) depicted the loss of confidence that leaders experience in what is described as “A typical vicious circle for leaders:”

The “vicious circle” can be especially vicious at times at Era Helicopters.  Although I will describe one example in fairly basic terms, it is really a complex issue involving federal regulations, liability, customer input, and operational control.  

Occasionally a helicopter will have a maintenance discrepancy while flying to or from an offshore oil platform.  In the eleven years I have been employed by Era Helicopters I have had a few minor discrepancies occur such as engine or transmission chip lights, oil temperature, or oil pressure lights.  A couple years ago management requested that pilots not make any decisions about maintenance issues and airworthiness of aircraft themselves.  The request was that any maintenance issue that occurred offshore, other than serious emergencies that require immediate action, needed to be brought to the attention of management so that they could make a decision what action to take.  This used to not be the case.  In the past a pilot held responsibility for determining the best way to proceed whether it was to land as soon as possible, continue to the destination, or return to the airport.  A couple years ago management began asking more and more questions, and requesting more and more details of any aircraft discrepancy that occurred offshore.  A few events were so heavily “armchair quarterbacked” by management that the pilots involved felt like they had no support of the decisions they had made.  As this began to happen more frequently, pilots began to worry they would be negatively critiqued if they made a decision, so they began to involve management in the process, calling any time they had a discrepancy.  As pilots involved management more in the decision making process, management began to feel that the pilots were less capable of making decisions independently.  They now have taken away the decision making ability from the pilots completely.  For many pilots this has been a source of frustration as they are forced to wait for management decisions before they can proceed.  On the other hand, taking the decision away from the pilots shields us from blame and disciplinary action.  I honestly do not believe that this has reduced the morale or followership at Era Helicopters very much.  I believe this to be the case because, in general, we operate at Level 1 or Level 2 followership; pilots are assigned to specific contracts, or specific charter flights.  We are essentially in the category of “wait to be told what to do,” or “ask to be told.” 

Lower level followership can be enhanced and raised to higher levels through action on the part of both pilots and management; the “vicious circle” can be reversed!  The level of followership that management expects from an individual pilot should be dependant on experience and the trust he or she has earned.  When a pilot calls in to report a maintenance discrepancies offshore, management should consider their level of experience with company policies and with the aircraft, as well as the trust they have earned.  As opposed to simply making the decision and telling the pilot what to do (Level 1) the manager should ask the pilot what he or she suggests (Level 2).  As greater trust and experience are developed the pilot could be conditioned to call, not only to report a discrepancy, but to be prepared with a proposed recommendation of how to proceed (Level 3).  As trust continues to grow, pilots would be enabled to make their own decisions and proceed with the action, however a report would be required after the event (Level 4).  The most trusted pilots would be asked to provide a periodic summary of any issues (Level 5).

In order for the “vicious circle” to be reversed, pilots would need to earn the trust of management by proving they possess the skill, knowledge, and experience to make important airworthiness decisions, and to know when to involve management or maintenance technicians to help make the decision.  Pilots can foster this environment by developing a professional relationship with their managers, by understanding the expectations and pressures that are placed on managers by senior management (Gabarro and Kotter, 1980), and by thinking systematically about the organization (How to lead, 2000).  Pilots need to understand how a maintenance discrepancy affects pilots, mechanics, billing, marketing, and operations.

References

Gabarro, J. J., & Kotter, J. P. (2005). Managing Your Boss. Harvard Business Review, 83(1), 92-99.

How to lead when you're not the boss. (cover story). (2000). Harvard Management Update, 5(3), 1.

Obolensky, N. (2016). Complex adaptive leadership: Embracing paradox and uncertainty (2nd ed.) New York, NY: Taylor & Francis

A633.5.3.RB_CliffordMarc

Order Out of Chaos

Chaos theory refers to the idea that seemingly random, unorganized events are subject to a subtle underlying order.  “The term ‘chaos theory’ used in physics refers to: an apparent lack of order in a system that nevertheless obeys particular laws and rules” (Oldwolf, 2018).  A typical example of chaos theory is the billiard table. Regardless of how consistent the break shot seems to be, the result of how the pack of balls breaks will be different.  Minute variations in speed, angle, and other factors influence the way the balls move, how they collide with each other, and how they react, resulting in a drastically different break shot each time.  The smallest variation can cause large results.  However, even though the results appear to be different each time, underlying patterns emerge.  Stewart (as cited in Obolensky, 2016) said “Chaos behavior obeys deterministic laws, but it is so irregular that to an untrained eye it looks pretty much random. Chaos is not just complicated, patternless behavior; it is far more subtle.  Chaos is apparently complicated, apparently patternless behavior that actually has a simple deterministic explanation.”

In a video entitled Who Needs Leaders? Obolensky (2008) provides an example in which it is demonstrated that order emerges from a seemingly chaotic and unorganized situation.  There were two aspects of this demonstration that were fascinating to me.  First, there were no leaders in the group.  Despite participating in a chaotic exercise there was nobody that was assigned to lead and organize the group.  There was no hierarchy, and no managers.  In fact, it is plausible to suggest that it would have taken longer to get the group as organized with leaders than it took without leaders.  Second, order emerged by following a few simple rules. “The counter-intuitive and intriguing conclusion is that the more complex the situation and task, the less directive traditional leadership is needed” (Obolensky, 2016).  This concept is difficult for traditional leaders to grasp because the typical reaction of a manager is to try to get control of the chaos by commanding, ordering, and directing.

Organizational leaders should be aware of the implications that chaos theory has on strategy. In place of a strategy that implements artificial restrictions and forces unnatural order, leaders need to take a step back and allow the underlying order of chaos to emerge.  Leaders can stimulate the emergence of order by providing the right environment.  Leaders can ensure that team members are aware of the underlying purpose and objectives, that the limitations of the environment are commonly known, and by empowering (Obolensky, 2016).

I witnessed aspects of the chaos theory first hand last September.  Hurricane Harvey impacted the Texas coast the last week of August, 2017.  Fortunately for me the devastating rainfall stayed west of where I live.  However, Orange texas, which is just 25 miles away received over 50 inches of precipitation.  The scene was chaotic as the floodwaters receded and people tried to make sense of what had happened.  As the floodwaters went down, church and community groups went to work.  Volunteers were lined up to offer assistance before the water had come down enough to start working.  I spent every weekend in September mucking out homes, ripping out sheetrock, moving saturated possessions to the street, and offering words of encouragement.  The various church and community groups self-organized; there was no call from the government asking for assistance.  Although each work team of about six to ten people had a team leader, there was nobody that was ultimately “in charge.”  The different churches and groups worked together and established a few simple rules.  For example, it was determined that the homes of community leaders and first responders had highest priority, followed by the elderly and incapacitated.  By the end of September thousands of homes had been mucked out.  It was incredible to be a part of it all and fascinating to see the paradox of order come out of chaos.

References

Obolensky, N. (2008). Who needs leaders? [Video File]. Retrieved from https://youtu.be/41QKeKQ2O3E

Obolensky, N. (2016). Complex adaptive leadership: Embracing paradox and uncertainty (2nd ed.) New York, NY: Taylor & Francis

Oldwolf, B. (2018, February 13). Chaos theory: A starter guide. Retrieved from https://owlcation.com/stem/Chaos-Theory-A-Starter-Guide

A633.4.3.RB_CliffordMarc

Reflecting on the previous exercise and this week's readings, why do you think the shift in leadership is occurring and do you think this is indicative of what is happening in your organization.  List three reasons that support or refute this position.

If so, how would leadership dynamics have to be altered to accommodate and promote these types of changes? What are the implications on strategy?


Leadership is changing.  Today’s business climate evolves so quickly that oftentimes leaders today feel that they cannot keep up.  Strategies that are developed to cope with change are frequently obsolete before implementation.  “We have changed the context within which we lead faster than we can change our assumptions about what leadership is” (Obolensky, 2016).  Leaders today are dealing with more complexity and uncertainty than ever before, and “Leaders seem more cornered, confused, and defensive than ever before” (Obolensky, 2016).  Competitive advantage used to be obtained through superior products, quicker response time, or more efficient processes.  In the current environment in which information about virtually everything is available, trade secrets and proprietary processes are almost non-existent.  Nearly any product or process can be replicated.

In the past, a leader’s source of power and influence was knowledge.  Those that were “in the know” wielded power over subordinates.  What was it they knew?  Leaders had better and more current information regarding the industry, the product, the competitors, and the customers than subordinates did.  Leaders had a systems view; they understood better than others how the parts and pieces interacted with each other.  Today, with the endless source of information available, leaders frequently are not privy to any better or more current information than subordinates.  It is not the case that leaders are less knowledgeable than those of previous generations; the fact is that the general population is more aware and more knowledgeable today than any other time in history.  Obolensky stated “Power has really shifted and diffused more than ever before” and  “Power is more a dynamic than something to be exercised by a single entity” (Obolensky, 2016).  Power has been diffused from top management, and has been dispersed down the hierarchy to the lower levels.

I believe I have seen evidence of the shift in leadership at the organization where I am employed.  It takes time to turn a ship around; it has been a long, slow process, but change is evident.  Three reasons that I feel the shift has been happening are: first, traditional command and direct leaders have been replaced;  Second, upward communication has improved; and third, the leadership charade has started to break.

In the past we have had numerous chief pilots at different times that were very traditional “command and direct” leaders.  They thought it was important for their authority to be felt and for the pilot group to respect them and so they motivated through threats and fear.  They perpetuated the leadership charade by trying to make everyone believe that they had all the answers and all the solutions to every problem.  In the last few years those traditional leaders have been replaced.  We have currently a director of operations that is a fantastic leader.  He expresses concern for the individual, asks for suggestions, and is more willing to listen than to be heard.

With the aforementioned change in leaders over the last few years there has also come a change in leadership style.  Previously communication generally flowed down the hierarchy.  Management would implement policies and the workforce would have to comply with them.  Suggestions from the lower levels were rarely sought.  Today there is an open forum, and a system in place for improvement suggestions.  There have been occasions when bonuses have been offered for the best suggestions for improvement.  There are still many employees that are “old school” that are suspicious of management and the current reporting culture, but as mentioned above it takes time to turn a ship.

Obolensky (2016) describes the leadership charade: “those at the top do not know the solutions to the problems faced by the organisations they lead.  And generally speaking they know that they do not know.  However, they cannot say that they do not know.”  This is especially true as the leaders at the top become more disconnected and remote from those on the front lines.  “Meanwhile, those at the bottom of the organisation are just as culpable.  They know the solutions (or most of them).  And they often know that the people at the top know they do not know!  But they still expect the top to know” (Obolensky, 2016).  This leadership charade has started to break up over the last few years as changes to key leadership positions have been made and as upward communication has improved.

While I was writing this Reflection Blog this morning I had additional evidence of the shift in leadership at my place of work.  Last week I emailed some comments about the insufficiency and lack of organization of our company Emergency Response Plan to the director of safety.  This morning he came over to the department where I work to discuss some of the concerns and ask for my suggestions and input for future revisions.  This would not have happened even just a couple years ago.

Today’s leaders need to be aware that they may not be privy to the most current information.  Having a strategy that fosters a free flow of information is key to success.  This can be accomplished by ensuring that the right people are in place who value the input and suggestions of the people at the front lines.

References

Obolensky, N. (2016). Complex adaptive leadership: Embracing paradox and uncertainty (2nd ed.) New York, NY: Taylor & Francis

A633.3.4.RB_CliffordMarc

Reflect on your own organization's strategy or an organization that is familiar to you.  How has it evolved over time? Discuss each stage of development and how feedback and strategy formulation have changed over time. Consider the next steps in your company's evolution and describe what it will look like in 10 years and where you will be.


Era Helicopters is one of the largest and oldest helicopter companies in the world.  Era currently operates more than 120 helicopters in several countries around the world.  During the time that I have been employed by Era Helicopters there have been components of the organization’s strategy that have remained the same, and others that have dramatically changed.

One of the key elements of Era Helicopters’ strategy that has remained constant is fleet diversification.  Era currently operates a of fleet helicopters that includes ten different makes and models in four different categories; heavy twin, medium twin, light twin, and single engine. “We believe a key factor in optimizing results of operations is to maintain a versatile, modern fleet” (Era Group Inc., 2011). Heavy twin engine aircraft are primarily utilized to transport up to nineteen workers to deep water oil production projects.  Medium twins generally are able to carry eleven to sixteen passengers and are utilized for deep and shallow water projects, search and rescue, and air medical operations.  Light twin engine helicopters can carry six to nine passengers and are used in shallow water offshore oil platform transportation.  Single engine aircraft provide transportation to shallow water operations at a lower operating cost. “By maintaining a diverse helicopter fleet, Era is able to provide virtually every helicopter service imaginable for any third-party” (Burkenroad, 2016).  A primary component of Era Helicopters’ strategy has been fleet diversification.

A few other key factors of Era Helicopters’ strategy have changed over the last decade.  When I first joined Era in 2007 it was owned by a company called SEACOR Holdings, a marine transportation company that specializes in serving the energy and agricultural industries. SEACOR Holdings was able to serve customers by providing helicopter transportation to offshore oil facilities.  In 2012 SEACOR Holdings separated its businesses and Era Group Inc. was created as a sole helicopter transportation company.  On January 31, 2013 Era Group began trading on the New York stock exchange.

As a result of the changing energy market, and reduced revenues from the oil and gas industry, Era Helicopters adapted its strategy and broadened its market diversification. “Historically our operations have primarily served the U.S. offshore oil and gas industry” (IPO).  In recent years Era Helicopters has been involved in Alaska flightseeing, emergency air medical, search and rescue, firefighting support, utility services, mining, pipeline survey, and has even entered the unmanned aerial vehicles market.  For the last couple years Era has had a partnership with an on demand air charter called Blade, which operates similar to Uber.  “In recent years we have made efforts to reduce our dependence on [the oil and gas] market and take advantage of the mobility and versatility of our helicopters in order to expand into other geographic regions and to serve other industries” (IPO).  In the last few years Era has had operations in the U.S., the U.K., Norway, Spain, India, the Dominican Republic, Suriname, Brazil, and Columbia.

Based on the business economy and market demands Era Helicopters underwent a significant management restructuring in 2014.  Unfortunately the traditional hierarchical structure remained in place.  Some positions were combined, and responsibilities of management were realigned.  The intent of the restructuring was “to streamline its business, provide better service to its customers and grow its market share on a global basis” (Era Helicopter, 2014).

In recent years Era Helicopters has adapted its strategy again, and has gone through a period of adaptation.  The crude oil prices dropped from $90-$100 a barrel in early 2014 to less than $40 a barrel in early 2016.  “As a result  upstream oil and gas companies faced a 50% drop in revenues in less than a year, putting the global energy market into significant distress” (Burkenroad, 2016).  Era has “transitioned to operating as a profitable helicopter dealer, gaining revenue by downsizing the fleet due to recent economic circumstances within the oil and gas industry” (Burkenroad, 2016).  During the current period of reduced oil prices Era has downsized its fleet to gain revenue from the sales of aircraft that have been underutilized as a result of the downturn in the oil market.  “If Era is going to survive long-term, the oil market will need to rebound. Era’s strategy mainly focuses on surviving as long as possible on effective asset management until this rebound occurs” (Burkenroad, 2016).  In just the last couple months the flightseeing operations in Alaska were sold.

Due to the fact that Era Helicopter’s success is so heavily dependent on the oil prices, it is impossible to predict what will happen to the company over the next ten years.  I see a couple possibilities.  If oil prices rebound Era Helicopters’ customer base will grow, revenues will increase, and the company will begin to expand to meet the needs of the customers.  Era Helicopters would increase its fleet, replacing aircraft that have been sold during the downturn in order to better serve the needs of the oil industry.  However, if oil prices remain low for years to come the impact on the company would be tremendous.  The fleet would continue to be reduced as the customer base shrinks.  The organizational structure would need to be significantly realigned.  Functional silos would need to be demolished as resources become more scarce and departments would need to reduce in size.  A cross-functional matrix structure would ensure that necessary tasks are accomplished without a hierarchy in each department.  Clearly a continued downturn in oil price would demand greater adaptation and creativity to ensure profitability for years to come.

References

Burkenroad Reports. (2016). Era Group Incorporated. Retrieved from https://tulane.app.box.com/s/pcdsmd5sojkqqgj0yaqdlk7ysqlwgn71

Era Group Inc. (2014, October 29). Era Group Inc. announces organizational realignment [Press release]. Retrieved from https://ir.erahelicopters.com/press-releases/detail/484/era-group-inc-announces-organizational-realignment

Era Group Inc. (2011) Era Group Inc IPO. Retrieved from https://www.sec.gov/Archives/edgar/data/1525221/000119312511320096/d213533ds1a.htm

A633.3.3.RB_CliffordMarc

Find a company which reflects Morning Star and St Luke’s image of a Complex Adaptive System (CAS) and reflect in your blog what the implications are for you and your present organization (or any organization you are familiar with). Identify what you believe are appropriate actions to move your organization forward.

Watch this Martin-Reeves Video and discuss the implications of strategy on your organization.  Why strategy, why now, and how could this discussion positively impact your organization?

Business today is evolving.  In fact, change seems to be essential to surviving today’s environment.  Just like the dinosaurs who were unable to survive a change to their environment, companies that fail to adapt are sure to become extinct.  The traditional hierarchical structure of functional departments is in the death throes.  Many organizations today are structured as cross-functional matrices in which “there are usually two chains of command, one along functional lines and the other along project, product, or client lines” (Stuckenbruck, 1979).  As organizations continue to evolve due to environmental demands the complex adaptive system begins to emerge.

Obolensky (2016) described organizations that function as complex adaptive systems.  Complex adaptive systems have the following characteristics: “clear people processes and policies, sound and flexible information and communication technology systems, and transparent, inclusive and flexible strategy development processes” (Obolensky, 2016).  In addition, complex adaptive systems have a very informal hierarchy, and “the formal hierarchy is rather flat” and “there is great emphasis on personal responsibility” (Obolensky, 2016).  Two organizations that have found success as complex adaptive systems are the Morning Star Company, and St. Luke’s.

The Morning Star Company was founded as a tomato trucking company in 1970 by Chris Rufer.  At the time the company consisted of a one truck owner operator that hauled tomatoes to area canneries for processing.  The company has grown to include three tomato processing plants.  “Today, Morning Star accounts for over 25% of the California processing tomato production, supplying 40% of the U.S. ingredient tomato paste and diced tomato markets, with industrial sales of approximately $350 million” (Morning Star Company, n.d.).  What makes the Morning Star Company especially unique is the lack of traditional hierarchy; nobody has a boss!.  Hamel (2011) suggested a few keys to the Morningstar Company’s success as a complex adaptive system; the company has made the mission the boss, let employees forge agreements, empowered everyone, not forced people into boxes, and encouraged competition for impact.  The company’s vision is “For Morning Star colleagues to be self-managing professionals, initiating communications and the coordination of their activities with fellow colleagues, customers, suppliers and fellow industry participants, absent directives from others” (Morning Star Company, n.d.).

St. Luke’s broke away from the U.S. ad agency Chiat/Day in 1995.  It quickly became one of the most talked about ad agencies in the United Kingdom.  St. Luke’s has won numerous awards, including being named second in Campaign’s Best Places to Work 2018 (St. Luke’s, n.d.).  The agency has the goal “to revolutionize the way business is done” (Coutu, 2000).  This goal is pursued by carefully managing a paradox; “it pushes its people to take enormous risks, but has built a working environment that feels. . . safe to it employees” (Coutu, 2000).  The organization has no traditional hierarchy, no bosses, and is owned by its employees (Coutu, 2000).  Co-founder, Andy Law said “We’re fundamentally convinced that there is a connection between co-ownership, creativity, collaboration, and competitive advantage” (Coutu, 2000).  The feeling of empowerment that St. Luke’s has developed in its employees by making them co-owners and collaborators has nudged the organization into the realm of complex adaptive systems.

Another company that has successfully functioned as a complex adaptive system is Reaktor.  Reaktor was originally founded in Helsinki in 2000, and has expanded to five locations worldwide, including one in New York City.  Reaktor offers consultancy and agency services and creates products and services which help clients “navigate the complex landscape of modern business” (Reaktor, n.d.).  Kristiansson (n.d) explained that the company has no hierarchy, and that “Small and autonomous teams take on projects, work closely with clients, communicate, and make decisions on their own.”  These autonomous teams provide an environment where individuals can grow, develop mutual respect, and distribute responsibility among team members (Kristiansson, n.d.).  An additional benefit of small self-managing teams is the ability to make decisions quickly without approval of the organizational hierarchy.  “A structure that enables quick decision-making is great for outstanding processes and results” (Kristiansson, n.d.)   CEO of the New York office, Joonas Makkonen said “You can’t ask me to decide for you.  You can talk to me and hopefully I can offer guidance, but in the end it’s you and your team calling the shots” (as cited in Kristiansson, n.d.).  Obolensky (2016) indicated that “The term CAS [Complex Adaptive System] is meant to reflect a dynamic organisation where teams are formed, perform and then disappear as the need arises.”

In order for the company that I work for to move forward and progress toward becoming a complex adaptive system, the concept of functional silos and departments would need to be completely abandoned.  Over the last few years there has been a change, and the different departments seem to be interacting better now than ever before.  However, it feels like we are stuck in the early stages of the transition with traditional hierarchies over each department.  Means need to be identified which would encourage the different departments to interact more to accomplish the common goal of providing safe and reliable helicopter transportation to offshore oil production facilities in the Gulf of Mexico.  Employees need to be empowered to perform their job functions without so much oversight and direction.  Actually making the transition and adopting a cross-functional matrix structure would continue the progression of the company toward becoming a complex adaptive system.

An additional path to becoming a complex adaptive system is by doing what Martin Reeves (2014) described when he indicated that all large organizations operate in numerous different contexts.  This fact suggests that leaders need to understand that there is no one size fits all when it comes to strategy.  Organizations need to adjust the strategy based on the demands of the current environment.  “Strategy is more important than ever, but we need to adopt the right approach, in the right situation.  We need to apply the whole pallet of human ingenuity to the science of winning” (Reeves, 2014).  Organizational leaders need to understand that they cannot control or change the environment in which they operate, but they can change their strategy as the environment changes.  The offshore helicopter industry is directly influenced by the price of oil; the higher the oil price, the more oil production, the greater the demand for helicopter transportation.  Leaders at my organization would benefit from modifying the business strategy as the business environment changes.  This is the path to prevent extinction.

References

Coutu, D. L. (2000). Creating the most frightening company on earth. Harvard Business Review, 78(5), 142-150.

Kristiansson, N. (n.d.). No hierarchy! An outsider’s view to one of the world’s coolest companies. Retrieved from https://www.reaktor.com/blog/no-hierarchy-outsiders-view-one-worlds-coolest-companies/

Morning Star Company (n.d.). Company history. Retrieved from http://morningstarco.com/index.cgi?Page=About Us

Obolensky, N. (2016). Complex adaptive leadership: Embracing paradox and uncertainty (2nd ed.) New York, NY: Taylor & Francis

Reaktor (n.d.). About. Retrieved from https://www.reaktor.com/about/

Reeves, M. (2014, December 22). Martin Reeves: Your strategy needs a strategy [video file]. Retrieved from https://youtu.be/YE_ETgaFVo8

St. Luke’s (n.d). St. Luke’s. Retrieved from http://stlukes.co.uk/

Stuckenbruck, L. C. (1979). The matrix organization. Project Management Quarterly, 10(3), 21–33.