Looking at South Africa’s state owned enterprises through a complexity lens

I recently completed the Cynefin Foundations online course. The Cynefin framework is useful to make sense of what is happening in South African state-owned enterprises.

The Cynefin framework presents five domains: disorder, chaos, complex, complicated, and obvious. Organizations, or parts of it, can exist in any of these domains and each one requires a different way of managing. (This is purposefully simplistic. To learn more about Cunefin read Dave Snowden’s writing at Cognitive Edge.)

An organization that provides a service based on a repeatable process, however complicated, exists in the obvious domain. But maintaining an obvious organisation requires a lot of energy: upholding good governance, investing in training, continually upgrading systems and infrastructure. Disinvestment leads to collapse as is the case in many South African state-owned enterprises.

When obvious organisations collapse they transition to the chaotic domain. The metaphor describing the boundary between the obvious domain and the chaotic domain is a cliff face. It is easy to fall down a cliff, but hard to get up again.

Fast forward to South Africa 2019. State owned enterprises like Eskom are poised at the cliff edge, or are already falling into the chaotic domain. Throwing money at them to fix the problem won’t work because they have progressed too far down the cliff. This approach could potentially bankrupt the country.

Stated differently, corruption is causing South Africa to lose the ability to run large obvious organisations. Trying to fix them by restoring them to a previous state is unlikely to work, and will drag on for a generation or more, and in the process create huge damage to the economy. Applying the Cynefin framework is a sobering reminder that hope is not a strategy. The path out of the chaotic domain is via the complex domain which calls for a completely different approach and mindset.

Instead of trying to fix these organizations, we need to create the foundations of future organisations that can replace, augment, or transform them, without sacrificing the entire economy. But it seems that the willpower, vision and thinking required to create these new foundations does not exist at this time.