Organisations are operating in more complex, inter-dependent environments. Therefore it is increasingly hard to be ‘universally’ confident. London Business School Professor Richard Jolly explained at Alumni Reunion this year the risks of ‘under’ or ‘over’ confidence and the behaviours of confident organisations.

1. Building the Confident
Organisation
LBS Alumni Reunion
18th May 2012
Professor Richard Jolly
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2. Dunbar’s Number
148
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3. The Post-Industrial Age
 “Managers differ in their ability to survive and thrive without
bureaucracy. What is an opportunity for some managers, is
distress for many others.” (Burt, 1996)
 In a world where unique human capital is increasingly rare,
your ability to get things done through other people
becomes critical
 This involves an increasing ability to handle complexity
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4. VUCA
 V = Volatility
– The nature and dynamics of change, and the nature and speed of
change forces and change catalysts.
 U = Uncertainty
– The lack of predictability, the prospects for surprise, and the sense
of awareness and understanding of issues and events.
 C = Complexity
– The multiplex of forces, the confounding of issues and the chaos
and confusion that surround an organization.
 A = Ambiguity
– The haziness of reality, the potential for misreads, and the mixed
meanings of conditions; cause-and-effect confusion.
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5. The ‘Fog of War’
“The great uncertainty of all data in war is a peculiar
difficulty, because all action must, to a certain
extent, be planned in a mere twilight, which in
addition not infrequently – like the effect of a fog or
moonshine – gives to things exaggerated
dimensions and unnatural appearance.”
Carl von Clausewitz (1780-1831)
Prussian General and Military Theorist
5
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6. "There is always an easy solution to
every human problem – neat, plausible,
and wrong.”
H.L. Mencken, 1917, “The Divine Afflatus" 6
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7. The ‘Fog of War’
 Organisations are operating in more complex,
inter-dependent environments
– Therefore need more complex strategies and
structures
– And the rise of specialists to help us navigate a
world we increasingly don’t understand
– General management increasingly is not trusted
– It is specialists who are the trusted heroes
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8. The Rise of Super-Confident Specialists
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9. The Fantasy of ‘Universal’ Confidence
 It is increasingly hard to be ‘universally’ confident
when confidence comes from our specialist expertise
 Confidence is a state of mind, but it is also an
‘attribution’
– We desperately want to believe that things are
under control
– Other, confident specialists have the answers
– Processes and safety mechanisms will protect us
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10. This Leads to ‘Risk Compensation’
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11. More Safety Mechanisms Create the
‘Illusion of Control’
The Law of Unintended Consequences
• Fermi nuclear plant in 1966 – zirconium filter fitted by
Nuclear Regulatory Commission
• Piper Alpha oil rig – safety device to prevent seawater
pumps triggering automatically
• RMBSs – complex legal safety mechanism to alter the
distribution of mortgage default risks
• CDSs – insurance for banks investing in CDOs against
them failing to pay debts
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12. An Attack on Rationality
“It is hard to overstate the damage recently done by leaders
who thought they knew more about the world than they did
– the managers and financiers who destroyed great
businesses in the pursuit of shareholder value; the
architects and planners who believed that cities could be
drawn on a blank sheet of paper; and the politicians who
believed they could improve public services by the
imposition of targets. They failed to acknowledge of the
complexity of the systems for which they were responsible
and the multiple needs of the individuals who operated
them.”
(John Kay, FT, 20th March 2010)
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13. The ‘Confidence Trick’ Has Been Exposed
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14. Disease is spreading through
our organisations…
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15. Hurry Sickness: Do you…?
 Look for a 30-second task while micro-waving
 Get a buzz from JUST catching a plane/train
 Have to do something else when you drive
 Eat at your desk (whilst also checking your emails)
 Do something else whilst brushing your teeth
 Get impatient when waiting in line/traffic
 Find your mobile phone painfully slow
 Hate the time it takes to boot up your computer
 Find yourself interrupting other people frequently
 Do something else in telephone conferences
 And finally…
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16. Push ‘door close’ buttons on elevators
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17. “When you’re fighting off the
alligators, it’s hard to
remember you were trying to
drain the swamp.”
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18. It’s Harder to Think in Complex Environments
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19. Two Delusional States
 Over-confidence
– Arrogance
– Hubris
– Grandiosity
– Intimidation
“It ain't what you don't know that gets you into trouble. It's what
you know for sure that just ain't so.”
Mark Twain (1835-1910)
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20. Over-Confidence
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21. Over-Confidence
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22. Two Delusional States
 Under-confidence
– Learned helplessness
– Victim of circumstances
– Bystander Effect
– ‘Downtown Calcutta in mid-summer’
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23. How Do We Cope with Greater Complexity?
‘The test of a first-rate intelligence is
the ability to hold two opposed ideas
in the mind at the same time, and
still retain the ability to function.’
F. Scott Fitzgerald 1896-1940
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24. A Confidence Spectrum
Under- Over-
Confident
Confident Confident
Able to deal with reality as it is
Able to handle uncertainty
Can cope with the unexpected – agile
Resilient
“What matters is not age but the trained ability to look at
the realities of life with an unsparing gaze, to bear those
realities and be a match for them inwardly.”
Max Weber
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25. What are the behaviours of
confident organisations?
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26. The 7 ‘C’s –
Behaviours of Confident Organisations
Communicate – Ask Questions and Listen
“The wise man doesn’t give
the right answers, he poses
the right questions.”
Claude Lévi-Strauss 1908 - 2009
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27. The 7 ‘C’s –
Behaviours of Confident Organisations
Communicate – Ask Questions and Listen
Control the Right Things – Empower the Rest
Collaborate – Shared Tasks
Courage to Take Wise Risks
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28. The 7 ‘C’s –
Behaviours of Confident Organisations
Communicate – Ask Questions and Listen
Control the Right Things – Empower the Rest
Collaborate – Shared Tasks
Courage to Take Wise Risks
Challenge – Difficult Conversations
Compete – Hungry to Win
Create Confidence in Others – Belief
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