Policy, and came up for renewal in the early 2000s. Although the Institute was generating $4 to $5 million in revenue per year, the new contract focused heavily on short-term assistance driven almost entirely by client requests with very limited authority to initiate projects and even heavier constraints on public dissemination of important findings and methods.
Under RAND’s informal “rules of the road,” as the senior leadership calls them, the contract was simply too restrictive. So RAND said no and basi- cally divested itself of the program.
When the government of oil-rich Qatar called, RAND saw a different kind of opportunity. Not only did the government ask RAND to use all of its expertise to help build a new school system, it invited RAND to help strengthen a variety of civic institutions and policy processes such as health care, information technology, and the environment through the creation of a joint RAND-Qatar Policy Institute in the nation’s new “Education City.”
Launched in October 2003, the institute houses a small RAND staff that oversees an increasingly broad agenda of research, including education, envi- ronmental, and national security research, while accounting for 5 percent of total organizational revenues in 2004.
its own destiny. Even if one can argue that RAND had some robustness in 1995, most notably in its alertness to the changing environment and the align- ment to move as a sum greater than its parts, it did not have enough agility and adaptability to assure success under a wide range of possible futures.
Toward both ends, it flattened its hierarchy, pushed more autonomy downward to its business units and the subunits therein, and strengthened incentives for diversification. It also increased its internal controls to pro- tect alignment from the centrifugal forces it created with the new strategy, and strengthened external outreach in search of new markets and funding.
Buffeted once by the end of the Cold War and again in the 1994 elections, RAND had no intention of waiting for another surprise. It chose instead to address its vulnerabilities, and shape the future to its advantage.
RAND’s experience suggests that all four pillars of robustness are essential for high performance under external instability. Alertness signals the need to adjust; agility provides the speed to adjust; adaptability provides the new strategies and products to hedge against vulnerabilities and shape a hoped-for future; and alignment assures that the organization acts as a whole.
Organizations can clearly over-build one or more of the pillars, how- ever. They can become so worried about the many futures they face that they cannot act in the present, become so consumed with the performance of “light” forces that they cannot bring anything heavy to a task, so focused on adapting that they forget to stand pat, and become so frightened of inconsistency that they drive out the creative spirit and experimentation needed for adaptability. They cannot be so tightly aligned that no one can breathe, but cannot be so lose that individual units might as well be flying the skull and crossbones.
Just because an organization canadapt does not mean it shouldadapt, for example. Rather, it should be able to adapt when necessary. Just because it can turn quickly in response to surprise does not mean it should always turn. Rather, it should only turn when its signposts show either increased vulnerability or a potent opportunity. Finally, just because it can see changes ahead does not mean it must act. If it has enough warning time, it might be better off standing pat to see just how a given future evolves.
Viewed as such, robustness is a form of organizational capital—it resides in the ability to act. As noted earlier, it hardly makes sense to adopt a robust plan if the organization does not have the alertness, agility, adapt- ability, andalignment to adjust the plan if and when events require a change.
The issue here is not whether an organization is robust or not per se, but how much robustness it can muster against the futures it faces.
When asked where one might look for robust organizations, RAND researchers offer a mix of benchmarks. Several argue that robustness is nearly impossible in a start-up, for example. “If you look at a little start- up company, then they’re likely to bet the whole company on a single future,” says Dewar. “If you look at a multinational, then maybe they’ll do robust decision-making across 90 percent of the company, while the other 10 percent takes flyers and hope that some of those will pay off. I just don’t think of a little start-up company as being agile or very alert.
They’re just going to build whatever they want to build and hope it works.
Robust decision-making says, ‘Okay, I’m light on my feet. I’m going to do the following for now and pay attention. And when I see how the world’s coming, I’m going to move to adapt.’ A little start-up company’s not doing that at all.”
Other researchers say that robustness is only revealed in periods of turbulence, if only because time-tested strategies continue to work rea- sonably well in the calm. But as Lempert argues, robust organizations are revealed when the environment changes quickly and/or dramatically.
“That’s when the organization that cannot implement robust adaptive plans may fall behind. I am thinking of the observation that many private sector firms that are market leaders in some dominant technology fail to make the lead when a disruptive technology comes along. The organizations can’t change rapidly enough to adapt to the new world.”
Still others talked about an organization’s ability to take a punch, response to a crisis, or overall alertness to market fluctuations—in other words, organizations find out how robust they are when the future changes suddenly. In the short-run, robust organizations may actually under perform against their competitors, if only because they keep at least some of their capital in reserve to hedge against surprise. They may also look less innovative than their peers, if only because they may be less will- ing to bet the company on a single breakthrough. In the long-term, how- ever, robust organization should produce higher growth and more innovation, if only because they have protected themselves against vul- nerability and can re-deploy resources quickly to exploit new opportuni- ties. As such, robust organizations would tend to show up in books such as Built to Lastand Good to Great, not in books about gales and tornadoes.
Although robustness is no guarantor of survival, robust organizations tend to be in the cellar when the storms hit, ready to get back to work and adapt as necessary once the clouds clear. (See Nancy Moore’s briefing slide on the scaffolding of innovation.)