What Does Chaos Theory and Human Resources Have in Common?

A day-in-the-life of an HR professional can be pretty chaotic – but there’s actually a bigger picture at play when it comes to HR’s role in wrangling organizational chaos.  Business is a game of confidence.  If an organization has the best product in the world, but not the confidence of its investors, customers or employees, that product may sell but will not be sustainable because of poor infrastructure.  If an organization has great management, but their products or services are just average, that organization will probably succeed and will eventually orchestrate better products and services.

As much as business claims numbers rule the world, confidence rules instinct.  If an investor feels in his bones that he’s discovered the next big thing – he will consider all of the information at hand – and barring something terrible, go with his instinct.  If a CEO sees productivity ticking up and the profit margin holding steady, but something in his gut tells him to hold and avoid unnecessary expenditures, he will often follow the subtle advice of his instinct to hold.

Consider Marissa Mayer – formerly of Google and recently named CEO of Yahoo – a company overflowing with chaos and uncertainty.  Over the last few years, we’ve all watched as Yahoo! has been through a few CEOs and investors’, customers’, and employees’ faith in the company has dwindled.  The hope is that the steps Ms. Mayer is taking (implementing culture changes with free food and talk of her “secret recruitment weapon”) will cause a positive “up-tick” of confidence in the company – that they selected the right person to get Yahoo! back on top of the market.

As CEO. Ms. Mayer is trying to reset the strategic trajectory of the organization.  Since she has joined, Ms. Mayer is implementing many things that worked at Google – changes that will certainly impact the workforce and therefore must be championed by HR.  She seems to be implementing a lot of things that worked at Google in order to restore confidence at – and in – Yahoo!

In today’s economy, there are many mixed messages.  Leaders downplay poor economic news, softening it or focusing on brighter spots to avoid undermining the confidence of investors and businesses.   Reduced confidence causes investors to tighten their purse strings of support or reduce their investment dollars.  It can cause businesses to hold back on hiring new employees or replacing employees who are retiring.  It can reduce confidence in new ventures and expansions of business that would require capital and resources and cause the deferring of plans that would create new jobs instead.

There are many signals in the world that are not numerical and are created by the humans that are busy scurrying about in business, trade, monetary policy, government, and financial institutions.  There is no way to predict the future because humans react differently to the same stimuli.  Therefore, there is no way to reduce the world to a world of numbers.  In fact, we could even apply a scientific name to it – chaos theory.

Chaos theory hypothesizes that – all things being equal – the results of a process can still be different.  Why?  Because of tiny variations in the things we “think” are equal.  Variations that are not apparent or discernible.  This seems like a great description of human behavior, doesn’t it?  Why does one person see an opportunity while another person sees disappointment?  Why does one person hold himself or herself accountable while another person blames others?  Why does one organization see an underserved niche in the market while others see something to be tolerated?

Those variations increase uncertainty in the economy and in the market.  They shake the perceptions of numbers and decrease confidence because humans are the ones making decisions in these organizations.  The human element perceives, interacts, and creates uncertainty and their reaction to it cannot be predicted.  The human element is Human Resources’ opportunity to excel.

Consider again what Marissa Mayer is doing at Yahoo!  She’s repeating methods and creating culture that was successful at Google.  She’s banking that those same elements will create synergy and productivity at Yahoo! and help the company and its workforce rise back into competitive greatness.  But if the same formula was equally successful in every situation that involved humans – we’d have no chaos.

Here are a few ways HR can support their organization in this time of uncertainty:

  1. Clearly Understand Your Organization’s Position in the Market Landscape – What is your organization struggling with?  Are you at the top of your game or struggling to regain lost market share.  Being at the top of the game can create arrogance, apathy and blindness.  Being the underdog can create fear, frustration, and apathy.  Understanding the landscape within which your organization operates is the first step.  This arms you with information that can help you identify the right tools to support the workforce and strategic goals, enhance confidence and create balanced decision making.
  2. Prepare for Multiple Scenarios – Once you understand the organizational landscape, you can begin to consider multiple scenarios and what if situations.  We recommend at least three variations of a scenario.  In the case of Yahoo! – what is critical if the turnaround doesn’t succeed?  If it succeeds spectacularly and the workforce isn’t ready to handle the increased demand?  If it works wonderfully at first, and then starts to lose ground rapidly?  Don’t be afraid to consider and discuss the difficulties as well as the successes that are possible.
  3. Encourage Positive Messaging and Positioning – There’s a difference between being a Pollyanna about a situation vs. being realistic and prepared.  You want to recognize the feelings of uncertainty that management or your staff may be having, but you don’t want to dwell on them.  If you’ve gone through steps 1 and 2, then you are already in a positive position to mitigate the risk of uncertainty within your organization – and you can demonstrate it.  The positive messaging comes into play when you outline your plans to increase your organization’s success and manage those possible risks.  Planning in advance will require strategic thinking and working with your executive team, but at the end of the day you are prepared to be the steward of the workforce through whatever the future holds.
  4. Promote Well-Being and Perceived Value through Increased Stability and Dependability – HR has a great opportunity to improve the perception of confidence by the workforce which helps the workforce stay more productive.  This is a result of the culmination of steps 1-3.  You can help to maintain or increase confidence through open, consistent, and realistic communications.

Just as representatives of businesses put on a good face for their investors, HR has an opportunity to generate and support confidence in their organization.  By being a leader and working to reduce instability and uncertainty, HR can improve the confidence of the workforce, investors, and customers and reduce the “perception” of chaos.

Carry on chaos-wrangler.  Carry on.

 

Kristie Evans
CEO, HR Logistics LLC

 

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