I did my dissertation on the topic of fun at work. I have spent my career working with clients in an effort to create an organizational context for the people that work in the organization that is fair, meaningful, and fun. In fact, my original hypothesis was that there are fun companies, and fun people. However, only half of my predictions came true. While my data strongly showed support for a fun organizational climate, it turned out that the individual differences we have when it comes to being a fun and playful person did not have any impact on people's experience of how fun their work was, nor the positive improvements in performance for more fun climates.
Fast forward from my graduate school days to now, 15 years of management consulting later, and in my experience the above findings still hold. Sure, there are different styles and corresponding effectiveness of leaders, some employees are more conscientious that others, and there are high and low performing teams both within and between different companies. There are even some interesting relationships between an individual's locus of control and motivation at work. But in both the literature and in my experience the number one thing that causes a person to respond positively on their engagement questionnaire, to go above and beyond their jobs (discretionary effort or organizational citizenship behavior) is a positive climate.
Of course, the million dollar question is - what is a positive organizational climate, and how do we create an environment where the context that an individual experiences allows them to find meaning in their work and intrinsic motivation to be their best selves on the job? Well, there has been no shortage of great thinkers over the last 80 years that have helped us with this question, and this is the place we will start.
The current writings on the shifts in the design of organizations and their supporting management systems are nothing short of inspiring. The principles of autonomy, meritocracy, and openness that have long been touted as the key to unleashing human potential are once again front and center in both the academic and applied literature.
But as an applied practitioner of organization design, I am left wanting more than the current focus on principles. The problem with what is it’s not how. And while I wholeheartedly believe and agree with my fellow org scientists that there is no one model, there is also no clear way for a leader or manager to take “paradox” or “fairness” and translate this into a detailed organization structure with roles, interactions, and accountabilities.
What we need is a bridge in the understanding. A clear guide to go from ideas to action, with a simple description of what each of the components are, what the pros and cons of each decision might be, and a corresponding description of how people might feel about these choices in that they create the context where we go to work every day. It is my hope that in the following paper we move towards this future.
How to design an organization
In the last few years, there has been a sharp increase in the number of management books published on the future of organizations. Citing many compelling future work trends such as the democratization of information due to new technologies, these authors are highly optimistic about new organizational forms. Gone will be traditional hierarchies steeped in costly bureaucracy. These will be replaced by purpose driven companies organized into autonomous networks of teams, where individual members are freed from drudgery and empowered to find meaning and a sense of belonging.
I am all for this version of the future. Having spent my life's work helping create a meaningful and enjoyable work environment for hundreds of organizations, this rosy future is highly appealing. In fact, many of the ideas are refreshed findings of some of my heroes, the great organizational thinkers of the 1960’s and 1970’s who revolutionized we thought about work and the workplace.
However, upon a thorough review of the historical and current viewpoints, I find there are two fundamental gaps that continue to plague org theory researchers and practitioners. As an organization strategist these unanswered questions have plagued me as well, and it is for this reason that I embark on this point of view.
One challenge with the existing literature is that the models in use do not clearly link the big, macro decisions that happen at the system level of an organization to the individual and group behaviors that result. My hypothesis is that by understanding the context that has been designed at the individual, group, and system units of analysis, we can understand the behaviors that are the direct outcomes of these choices. Knowing this, we can make design decisions at the individual, group, and system level that will allow us to understand and in some cases predict the subsequent behaviors with some level of accuracy.
The second and related challenge is that the interventions suggested by researchers and practitioners to remedy the many challenges of traditional organizational design in today's environment are almost solely focused on individual and group interventions (Skill development! Team Building! Autonomy!), with little help when it comes to guidance on designing the context that drives the individual and group behavior in the first place. There is much of the “what” at the system level (Meaningful work! Purpose! Enterprise mindset!) but little of the “how”.
I will attempt to close these gaps on the following pages.
Finally, much of the recent academic, business, and popular press coverage of organizational evolution has focused on the “death of bureaucracy”. (insert some examples from books). However, when you closely examine all of the recommended solutions, you find that in 100% of the corporate examples, the structural design is one of hierarchy. In the following pages I will try to illustrate how what everyone is really doing is trying to build a better hierarchy. There is real power in understanding this, because once we do we can assess the existing problems in the
This is a long form text area designed for your content that you can fill up with as many words as your heart desires. You can write articles, long mission statements, company policies, executive profiles, company awards/distinctions, office locations, shareholder reports, whitepapers, media mentions and other pieces of content that don’t fit into a shorter, more succinct space.
design and make real and lasting changes that will allow us to arrive at our desired future, that of realizing our full potential at work. Insert more examples about why we must design better hierarchies and why we need a comprehensive model that allows us to do this considering all the factors relevant to context that drives desired behaviors. Need more evidence that this is missing and how it will help.
The best theory is one that explains something simply that is otherwise confusing. Sadly, at this stage in my theoretical journey, I do not think I have reached this standard. My plan is to continue to evolve my thinking on these topics and to conduct research to test the model in order to come up with not just anecdotal but also empirical evidence to support the thinking.
For now, what I have attempted to do is what in 1975 Harvard professor Edward O. Wilson called Consilience - the “jumping together” of ideas to create a unified body of knowledge (pg 38 Righteous Mind, see original reference). Wilson dreamed of the “new synthesis that would link philosophy, biology and evolution sciences. I have a similar dream, attempting to jumble together industrial psychology, organization theory, systems thinking, social science, network science, and current technological advances in collaboration to create a view of the modern organization, how to think about creating different contexts to get different experiences and therefore behaviors.
The Model in Contect
Quote Statucian george box - all models are wrong some models are useful
In my experience there are three macro choices that must be made in any organizational form that will lead to many micro decisions and then ultimately to the organizational climate you create for your people and the corresponding actions and behaviors they exhibit at work. There will always be a set of choices that will have different outcomes. INSERT FIGURE 1 (my three step model)
Based on our mission, where should we play?
In order to win, what capabilities must we have?
What organizational context should we create to achieve our purpose?
The first is your unique purpose and how that fits within the broader ecosystem. Based on what you hope to achieve, you can create a traditional, stand alone organization and focus within your four walls. You can also choose different business models, such as joint ventures with other organizations, perhaps using a platform to reduce the complexity of contracting and increase the ease of transacting with others. You can set up an open source arrangement, where individuals and groups join the organization voluntarily and contribute what they like when they like. You can look at the capabilities of other individuals, groups, and companies and collaborate across these networks in the ecosystem, determining which capabilities you will focus on and which ones you will partner with others on, and which ones you will either buy or sell to.
Many of these more sophisticated options did not exist prior to the information age, where the ability to find and connect with the different ecosystem players was bound by constraints such as geography. Making these ecosystem choices is an ongoing effort that requires a deep appreciation of the complexity of the markets around the globe and ultimately these choices will lead to success or failure.
These decisions - while critical for organizational life - are almost always made by one (founder/CEO at inception) or maybe a few (Board, CEO, and her key advisors in a going concern), and they are made fairly infrequently.
How you make these choices, while not the central theme of this paper, can perhaps best be thought of by using Roger Martins strategic choice framework, first published in XXX book. The simple question you are answering in the business model question is “based on our aspiration, where will we play”? This should be your essential intent, that is both meaningful and measurable. (reference ESSENTIALISM book)
Regardless of the choices you make in the dizzying array of business model options between a holding company to a fully integrated operating company, at some point you will land on the optimal way to achieve your purpose at that moment in time, and then turn your attention to figuring out how you will operate your piece of the pie. And this is where the previous literature gets confusing, because many authors mix up business model, operating model, and organizational model. There are really only three distinct ways to group capabilities together to deliver the value your business model is predicated upon. These are your macro model choices, the “big rocks” that will set the frame for architecting the organization's context:
Insert figure 2
Capability Solution Market
Capability - define functional orientation
Market - define market orientation, to customer by segmentation or lifecycle and geography
Solution - define produce, service, or some combination of the two
The fourth and by far the most common value model option is a hybrid or a multi dimensional model that combines different aspects of the three above. The approach to answering this
question is “what capabilities must we have to win?”. This really goes back to the Porter days of core competencies. If you get right down to it, what is your core competency that makes you unique. A core competency is a concept in management theory introduced by Prahalad and Hamel which is the foundation of companies' competitiveness. Core competencies fulfill three criteria:
Based on your core competencies, you can identify your primary value characteristic. Almost all organizations of a certain size have chosen the hybrid model, as it allows them to maximize all the value that their core competency brings to the market. So they have a primary and secondary operating characteristic, for example geography and solution, or customer and function.
A final value choice here is the degree of integration you will want between the different operating units. Much of this will be resolved in the organization content you create, but some philosophical decisions on the amount of central authority, the placement of P&L responsibilities, and the basic understanding of what capabilities must be mission focused near to the customer vs which ones can be delivered across the enterprise can be contemplated here. (G, page15)
F - Companies that make their P&L the cornerstone of accountability end up with multiple P&L’s - per region, business unit, key customer account, products, etc. This is not recommended!
Now here comes the last question on Martin’s choice cascade, which is “what management systems are required?” (reference). To me, this is the heart of organization design and the most complex set of choices that must be contemplated. These are also choices that in practice tend to be revisited and changed much more frequently by many more people in the organization than the first two macro decisions. In my experience, it is the answers to these questions on the organizational model that will allow you to actually deliver the capabilities needed to win in the space your aspiration has led you to. Because it is these system choices that create individual and group choices that drive the workers experience of the workplace.
The challenge is that when companies look to design or redesign they tend to look at only a few of the trade offs and make changes to a subset of the variables that create the organizational context that gives individuals and groups their experience.
D - The improvement paradox - in complexity, working on separate parts does not improve the whole it actually damages the whole.
SYSTEMS ARE NOT IMPROVED BY TINKERING WITH THE PARTS, BUT BY WORKING ON THEIR INTERACTIONS
IT IS NOT SO MUCH THE PARTS THAT MATTER, BUT THEIR FIT Pg 19
The Importance of Units of Analysis
I - Water - three different states, once substance, liquid, ice, steam (95 ish?, check)
Before describing my organization architecture model, a word about units of analysis. The core question of organizing is how to ensure that any individual in an organization has the right information to make the right decisions at the right time. (pg 13, A). When determining how to best achieve this, it is important to understand that you can create this individual experience using three different units of analysis - individual, group, and system.
Individuals are the most common units of analysis within organizational research and interventions. This is the case because one of the core benefits of organizational design is understanding the relationships between individuals and the organizational context. Taken together, information about individuals and their personal experiences can reveal patterns and trends that are common to an organization or to a particular group within it.
Organization strategists are keenly interested in social ties and relationships, which means that they often study groups of people, be they large or small. Groups can be anything from a “two pizza” project team, to a department, to a business unit or country made up of multiple departments, to whole generations of people (think Millennials and all the attention they get).
Finally systems differ from groups in that they are considered a more formal and, well, organized ways of collecting people together around specific goals and norms. Those of us who study organizations might also be interested in comparing different examples of similar organizations to reveal the nuanced ways in which they operate, and the norms that shape those operations.
Cole, Nicki Lisa, Ph.D. "Units of Analysis as Related to Sociology." ThoughtCo, Aug. 27, 2020, thoughtco.com/wh-units-of-analysis-matter-4019028.
Unit of analysis by design choices
Organizational Climate Outputs (individual perceptions of meaning, belonging, and purpose)
OR culture - observation of behaviors, the style of the org
Over the few chapters, I will describe each of the elements of this model in detail, and attempt to include links to existing research to validate each element. But in order to understand how I developed this model, it will be helpful to review some of the great thinkers of our time in the industrial/organizational field of psychology, as well as to review some of the most modern thinking on optimal designs for organizational life.
The History of Industrial/Organizational Psychology Literature and Adjacent Theorists
Need to link these more to insights on how to design org
“You cannot motivate people, that door is locked from the inside. But what you can do is create conditions… (up the organization)
There are two bodies of literature that I will draw from to support my model development. The first is psychology, and to begin with Industrial/Organizational psychology which is what I am trained in. I/O psychology generally operates within a positivist, analytical framework, and almost exclusively adopts an analytical-empirical epistemology (Pietersen, 1989 as cited in Rothmann & Cilliers, 2007). (need to look up references). This will demonstrate how humans are intrinsically motivated and how knowing how we tick allows the organization architect to design the right conditions to allow humans to flourish at work.
Henry Mintzberg revolutionized our understanding of what managers do in The Nature of Managerial Work, his landmark book. He took the existing theories from scientific management and set out to observe leaders in their natural habitat - but he could not find anyone planning, organizing, directing, controlling. Instead, they were interrupted, moving between multiple tasks, performing interpersonal, decisional and informational activities.
In reality, the practice of management has not changed over the past 60 years, but the context has. The liaison aspects of connecting different groups within and outside the organization is more important than ever. Informational role may be diminished in its importance as it is not just management that has access to scarce information needed to make decisions, which allows decision making to be moved to those closest to the information, thereby speeding up the organization's ability to make decisions in response to real time changes in customer demands.
McGreggor took a human relations approach (Dad’s PhD), interested in our beliefs about what motivates people to work hard. At the core, interested in how our beliefs shape behavior, theory
X believes employees are inherently lazy and indifferent to organizational needs and must be persuaded, rewarded, and controlled. Force breeds counter force. Theory Y says that working hard is enjoyable and external control is not the right means to bring about organizational effort. In other words, if people agree with the goals they will work really hard, but the way we design orgs does not really allow us to tap into human potential. So if things are arranged the right way, can have self actualization needs met while working towards organizational goals. Make different choices in how you talk to people. Very similar to Maslow's hierarchy of needs, engage higher level needs like belonging.
Rensis Likert secrets of high producing managers outlined four different types of managers process models of motivation, participative management is based on relationships not command and control, communication is excellent flowing up and down and laterally across peer groups, the result is participation in decision making, which leads to high commitment to goals, highest productivity. More modern and sophisticated version of mcgregor, with this last system type a fleshed out version of theory Y. The managers, scared of motivation, did this by paying attention to the full range of maslow's needs. This allowed them to feel a higher level of agency and therefore more motivation to complete goals, group decisions tend to be better outcomes. Linking pin organizational structures represent the traditional hierarchy but added at the time a new, innovative idea that the manager that is sitting above their team is part of the group of other managers, meaning that the managers can participate in the hither level decisions. Subsequent 50 years of research showing participative management is the most effective at motivating teams towards organizational goals.
(Picture of chart with triangles)
Chris Argys took Mcgregor's model and applied psychological principles more thoroughly. Starts with the tension of the needs of the organization and that of the individual. Apathy arises when managers treat employees like children, which is toxic to company and to people. Instead, his research showed greater productivity if you treat people as equals, align individual and corporate goals, give people autonomy and a sense of agency, and encourage development of skills and knowledge.
Edwin Locke goal setting theory as a technique, intention to achieve a goal you set yourself. Chain of motivation that starts with our personal values that leads to desire to achieve/intentions, which motivates us to take action, these actions manifest in our workplace performance, which leads to feedback and this leads to further enhanced or decreased motivation towards. Traverny and Bandura, works better if you get constant feedback on how you are doing towards the goals. Specific, challenging, committed, public and within control to influence the outcome. Good quality feedback is the final key. If delegate goals will not get motivation towards them unless you combine with extrinsic motivators to drive behaviors. Mclelland and Pink research reinforces these findings.
VIctor Vroom Expectancy theory of motivation, expressed in mathematical equations. Need to believe that if the work will get the result, getting the results required will be instrumental in getting the reward, and vallance is high so the reward satisfaction. M= ExIxV.
Hertzberg studied a whole range of things that make us satisfied at work. Motivation is not the opposite of de-motivation. What satisfies us at work - motivators tend to be intrinsic to the work itself, achieving and being recognized, doing good and worthwhile work, so too is responsibility - autonomy to direct our own work but perhaps that of others, and advancement in our work. So too is growth, sense we are a better person that we were before.
Certain things that leave us unsatisfied, but if we fix them they don't suddenly feel motivated, they just stop feeling demotivated. Neutral if satisfied, then once we are in that neutral position then we feel enthustiac. Hygiene factors include corporate policies, way we are supervised, our salary ( and our status in the workplace. KITA factors (kick in the ass) both negative and positive - negative actual (remove resources) or psychological (feel like cant trust, undue stress or pressure). Positive ones are salary adjustments, perks, bonuses, etc. Never make you feel motivated, but might stop feeling bad about work.
John Stacy Adams Equity Theory, we are motivated when our perceptions of the workplace is fair and not when it's unfair. What matters most in workplace motivation is the effort we put in and the outcomes we get. If we see it's fair we will be motivated. But if we look at our colleague doing the same work but they are getting paid more, or we look at another colleague who has the same reward but seems to be doing less. Equity norm, social comparison, and then balance redress. If we are being over rewarded we may work harder, and if not we may work less. Cognitive distortion, we mentally distort the work or the rewards so we have a sense things are fair.
Ryan and Deci Self Determination Theory, dominant role of intrinsic (comes from inside, drive for fulfillment and growth) motivation and the conditions where extrinsic motivation can help. It's our social context that provides extrinsic motivators (the promise of rewards). Psychological nutrients are needed for motivation, the first is autonomy which means I can make my own decisions within the context of the people around me. Bonus systems fail in knowledge work because professionals feel motivated by intrinsic controlling work and developing a higher level of competence, robbed of autonomy and control. Competence is second of psychological nutrients. Being confident can do a good job. If you give someone unexpected positive feedback will boost motivation, but if it's negative will have a dip in motivation as it goes right to the heart of our belief in our competence. Third and final is relatedness, our connection to others, security being part of a community and being cared for. This is critical because if we don't have this we don't feel competent nor autonomous.
McClelland’s theory of needs, there are three, need for achievement, power, and affiliation. Different individuals have a primary orientation to one of these. Aldefer suggested existence, relatedness, and growth - very similar to maslow, with some differences. ERG theory unlike maslow all three need to be met simultaneously, and if there is a gap in one of these three need we are not motivated.
Hackman and Oldman, job satisfaction. Intrinsic reward when we complete a task, but what is it that motivates us to take on the task in the first place -motivation potential calculated based on
three principles 1 - meaning, defined as identification with completed piece of work, the variety of the tasks we do, and their significance in terms of making a difference that counts, 2 - autonomy, which is about our sense of responsibility for our work, and 3 - feedback we can gain ourselves on how well we are doing. All leads to higher performance, greater productivity, lower absenteeism and turnover.
Social Theory of Organization by Katz and Khan. Classical management theory says org as machines - taylorism, productivity and control, one best way to do every single task. Systems theory is a whole different way to view life at work, to describe and explain how orgs work and pursue multiple ways to pursue work, almost a reaction against the traditional school. In this theory we have inputs, throughputs, and outputs. VIewed as a whole, not just a collection of separate pieces, all interconnected or interdependent subsystems, org then department then team. Equifinality, there is no one best way, however there are some ways that are better than others. Left on their own, systems will entropy or run down into disorganization, so is a whole effort to balance. Chaos theory, learning and loosely coupled systems are all direct outputs of the frame of systems theory.
Why are Organizations not working today?
Our organizations get such a bad rap! Medical school problem, lens you look at things.
Optimism level, stress as a challenge, and social support. BEcome positive in the present then our brains work harder, better, better work outcomes.
B - Humanocrocy After a broad workforce analysis, Hamel and coauthor Zanini claim that roughly half of the 23.8 million management roles in the US are unnecessary. Lots of good data showing how much time we waste on internal compliance activities such as budgeting and planning, about 16% of our working lives. Let's say half of this effort is not adding value, “this equates to 9 million people being wasted on bureaucratic theatre, and this show has no intermission”. The authors state that we cannot create new organizations with old principles.
E - Today’s workplaces are broken. With 85% of employees disengaged, 23% feeling burned out and 37% believing that their job makes no useful contribution to society, work as we know it today is simply not working.
A - Brave new work by Aaron Digan (sp?) expands on the notion of “organizational debt” that Steve Blank in his book Lean Startup defined as “all the people/culture compromises made to just get it done” (find reference). Beyond just a start up, aaron defines organizational debt as any structure or policy that no longer serves an organization. “The ever growing invite list for that monthly meeting that nobody likes? That's debt. Using last year's budget as a baseline for this year's budget? That's debt. To avoid debt, we need consistent and vigilant simplification.
C - Reinventing organizations
C - Organizations as machines - the engineering jargon we use to talk about organizations reveals how deeply we hold this metaphor. We talk about inits and layers, inputs and outputs, efficiency and effectiveness, pulling the lever, moving the needle, acceleration and hitting the brakes, scoping problems, scaling solutions, information flows and bottlenecks, leaders and consultants DESIGN organizations Humans are RESOURCES that must be carefully ALIGNED on the chart like cogs in a machine. Changes must be planned and blueprinted, then carefully implemented. If some of the machines function below the expectation, it is probably time for some soft intervention and the occasional team building - like injecting oil into grease the wheels.
T(a) - Wicked problems vs tame problems (complex vs complididnasses)
D - Org for Complexity
Complexity vs complicated - a high precision machine is complicated, such as a car engine or a watch. Calibrated to diminish mistakes and uncertainty, operate in standardized ways. COmplex system have the presence or participation of living creatures, are living systems are observable not controllable, as behavior is not predictable, there are elements that can act in standardised ways but their interaction is constantly changing in discounous ways, and the only thing capable of dealing with such systems are human beings. In complexity, the question is not how to solve a problem, but who can do it. Instead of tools, standardization , rules, structures, processes, what matter is people with mastery, ideas, problem solving biome about communication.
F - Old mechanistic approach, taylor beginnings, assumes that structure, processes and systems have a direct and predictable effect on performance and second that the human factor is the weakest and least reliable link of the organization and it is essential to control people's behavior through rules to specify their actions and through financial incentives linked to metrics.
No matter how you arrange the boces, there will always be performance requirements that fall between them requiring corporation (160)
Add a soft approach to grease the wheels. Both seek to control the individual, soft assumes what matters is emotional rather than financial stimuli. People feel bad and ineffective, so they get team building and celebrations, but the symptoms have been addressed not the problems.
F - Cumbersome org mechanisms, procedures, roles, etc. Managers of complex organizations spend about 60% of their total work hours in coordination meetings - work on work. This gives them less time with their teams, and in turn they spend up to 80% of their time wasted, working harder and hader on non value add activities.
F - Resulting in bad strategies. Because the complicated organization cannot help but have a granted view of its competitive landscape. The information it gathers about customers, suppliers, competitors, and regulars remains scattered across functions, business lines, and geographies. The organization is unable to accumulate and link these various inputs into a holistic understanding of the opportunity and threats that the strategy needs to address (pg 1710).
K - Most organizations are designed to facilitate, motivate, or constrain an individual's behavior toward driving its core purpose. They can't help themselves. They have been designed to drive operational efficiencies, and their purpose is to manage, coordinate, and control activities. Although times have changed dramatically, many organizations have failed to follow suit. Instead, they have doubled down on the creation of advanced operating systems, focusing intensely on data, analytics, and automated systems that strive for greater order and efficiency over adaptitionan creativity. (p10)
S - Today, hierarchy undeniably has it drawbacks, challenged with how to release and sustain the initiative and adaptability of the entrepreneur. BUt it is the only form that can enable large numbers of people to have unambiguous accountabilities for the work they do.
Collaboration overload, attention deficit disorder, cognitive complexity evolution (HERE?)
C - Interesting parallels to childhood moral development stages, most does not hold but interesting idea to compare the evolution of the human brain to different types of organizational models to see if we indeed “mature” to a certain set of practices that allow an organization that is self actualized. The notion of “teal” organizations that have a set of characteristics that allow human evolution at work.
TIf NOte - Cognitive complexity might be a good rif of of this concept.
“There is nothing inherently “better” about being at a higher level of development, just as an adolescent is not “better” than a toddler. However, the fact remains that an adolescent is able to do more, because he or she can think in more sophisticated ways than a toddler. Any level of development is okay; the question is whether that level of development is a good fit for the task at hand.” Nick Petrie (Center for Creative Leadership)
J - Fame is simply an imbalance between inbound and outbound attention, more arrows pointing in that out. Two things have to happen, the first is scale: he or she has to have some minimum amount of attention, an audience in the thoughts or more, second he has to be unable to reciprocate. No matter who you are, you can't return all the attention at a certain scale. The mere technological possibility of reply isn't enough to overcome the human limits of attention.
Email is such a funny thing. People hand you these single little messages that are no heavier than a river pebble. But it doesn't take long until you have acquired a pile of pebbles that are taller than you and heavier than you could ever hope to move, even if you wanted to do over a few hundred trips. But for the person who took the time to hand you their pebble, it seems outrageous math you can handle that one tiny thing. What pile? It’s just a pebble... Merlin Mann, page 95 (find originally citation).
Why do we have to Organize Work in the First Place?
Even Jesus needed twelve disciples.
Our organizations allow us to do together what can’t be done alone. No single human can build a car, launch a satellite, create an operating system, train a doctor, erect a building, or mobilize a movement.
J - The ability of the traditional management structure to simplify coordination helps answer one of the most famous questions in all of economics: if markets are such a good idea, why do we have organizations at all? Ronald COase 1937 Nature of the Firm, first coherent explanation of the value of hierarchical organization. Core realized that the workers could simply contract with one another, selling their labor and buying the labor of others in turn, in a market, without needing any managerial oversight. However, a completely open market for labor, would underperform labor in firms because of the transaction costs, and in particular the costs of discovering the options and making and enforcing agreements among the participating parties. The more people are involved in a given task, the more potential agreements need to be negotiated to do anything, and the greater the transaction costs. A firm is successful with the costs of directing employee efforts are lower than the potential gains from directing the.
Knowledge work and technology platforms are driving a significant trend towards decentralization. (does the central/decentral debate have a place in this paper and if so, where?)
Current Organization Design Perspectives
Quote from (G) “No organisation design is ever going to be perfect. You are always trading things off. The key is to identify the most important gain you want to make in redesigning the organisation. You will inevitably make compromises by focusing on that priority, but well-designed collaboration mechanisms such as lateral processes, networks and planning forums can help offset any potential losses.” Nick South, Partner and Managing Director, The Boston Consulting Group
Our modern theorists have taken much of our heroes core beliefs about human nature and applied this thinking to the current global, digital, unpredictable world we live in today. Unlike L/O’s primarily epistemological approach to research, they approach their inquiry using Subjectivism (also known as interpretivism), a method where one perceives that social phenomena are created from the perceptions and consequent actions of those social actors concerned with their existence. Formally, “ontological position which asserts that social phenomena and their meanings are continually being accomplished by social actors”.) Bryman, A. (2012) “Social Research Methods” 4th edition, Oxford University Press).
In plain english, this means that these business researchers and practitioners have observed phenomena and interpreted the meaning of their observations to form conclusions. Through case studies of progressive and not so progressive companies, what they have seen and concluded is that much of the foundational literature still holds in today's business context.
To summarize, here are the key ideas from several recent books: (Need to consolidate at individual, group, and system levels)
Q - Senge - What we call tech today, jay forrester was his mentor, at 35 years old after project whirlwind complete said it's not technology that is the complex thing to solve it is our human system. A living system recreates itself. Longest living cell in the human body is 7 years. Literally the entire system is replaced in 7 years. Machine is created by another, the living system is self created.
R - Pink (Drive) - summarized SDT and Theory X/Y in his model. For motivation 3.0, mechanistic work, very rule based, extrinsic rewards can work. But for heuristic - or knowledge work - extrinsic motivators diminish levels of intrinsic motivation, robs you of your control and autonomy and therefore motivation, also diminish performance and stifle creativity. Crowd out good behavior, and in its place they encourage short cuts. Also can become addictive, because they stimulate dopamine in our brains so we are encouraged for short term thinking rather than the long view, which is what we need in organizations. Three pillars of intrinsic motivation, which is autonomy, mastery, and purpose or meaning (start with why Simon S).
HR- built entirely on carrots and sticks, mechanistic reward and punishment approach often does not work and actually does harm - if then rewards look really well for simple rules and easy destinations, they narrow our focus. But for the complex problems you want more creative, conceptual thinking.
Not a feeling or a philosophy, this is a true fact.
Don't do more of the wrong things, sweeter carrot or shaper stick. DEsire to do things because they matter, they are interesting, part of something important. AUtonomy - direct own lives, mastery - get better at something that matters, and purpose - the yearning to do what we do in service of something larger than ourselves.
Autonomy - 20th century management, compliance. the 21st century means paying fairly and getting money off the table and giving people lots of autonomy.
“Mismatch between what science knows and what business does”
A - Brave New Work - three sentence summary of hypothesis and model
B - Humanocrocy - Before we needed to think about how to maximize compliance, and thereby, operational efficiency. Even though those things are still important, Hamel implied that now it is more crucial to think about how to maximize human contribution and thereby impact. Instead of focusing on the traditional principles like stratification, standardization, specialization, formalization, and routinization, Hamel recommended us to rather focus on principles like experimentation, meritocracy, openness, community, and ownership.
C - Can we create organizations free of the pathologies that show up all too often in the workplace? Free of politics, bureaucracy, and infighting; free of stress and burnout; free of resignation, resentment, and apathy; free of the posturing at the top and the drudgery at the bottom?
D - People are intrinsically motivated, motivation is. You cannot motivate, you can de motivate through leader behavior, or you can create the context for motivation to show up. Pg 27
E - Corporate rebels - The good news? There is a better way. And it's not just theory. It's already practiced in pioneering organisations around the globe. Drawing on Minnaar and De Morree’s visits to 100+ of the world’s most progressive organisations, this book gives direct evidence that you can make work enjoyable and rewarding, while boosting performance and success.
J - Here comes everybody - insert three sentences
H - Andy Grove High output management
I - Context book
M - Wisdom of crowds
M -Wise crowds have several key characteristics. First off, the crowd should be able to have a diversity of opinions. Secondly, one person’s opinion should remain independent of those around them (and should not be influenced by anyone else). Next, anyone taking part in the crowd should be able to make their own opinion based on their individual knowledge. Finally, the crowd should be able to aggregate individual opinions into one collective decision.
N - Org Revolution sentences
F - Six simple rules
What was striking is how poorly served these people were by the conventional wisdom in management - theories, models, and practice developed over the past 100 years. All these solutions only seem to make it worse.
Wasn't it Einstein who suggested that we should make things as simple as possible, but no simpler?
From ted talk
The effectiveness of the company It is the interplay, the interactions, the synapsis. Not the skeleton of boxes but the nervous system of intelligence. When people corporate use less resources.
Individuals have to compensate through their individual efforts for the lack of cooperation in the system. Stress, burnout, now wonder if they disengage. Is NOT about interpersonal relationships in liking. (example of TV’s with wife). Reinforce managers as integrators, remove layers, otherwise too far from reality, then they need KPI’s. Give them power and interest to cooperate. (game theory) increase reciprocity, remove buffers that make us self sufficient. Remove the second TV.
The real battle is not against competitors. The real battle is against ourselves, our complicatedness.
F - DO NOT FOLLOW THE TRADITIONAL SEQUENCE form strategy to structures to process to systems to metrics to incentives to career paths. Instead use the new requirements and link them to what people do today.
K - Adaptive space
Note - add actual network graph from jobs/adaptive space picture referenced.
The relational space necessary for people to freely explore, exchange and debate ideas. Enables org to positively disrupt so they can control their own destiny before someone else does. Facilitates the connections necessary to provide a social bridge to transport ideas from entrepreneurial pockets found throughout the org into the more formal operational system.
L - Organized mind - add sentences
S - In Praise of Hierarchy Elliott Jaques His 35 years of research led him to conclude that hierarchy is the most efficient, the hardiest, and the most natural structure ever devised for large organizations. “Properly structured, hierarch can release energy and creativity, rationalize productivity, and actually improve morale.”
Humans are 90% CHip and 10% bee
THe second body of literature I will draw upon is a combination of moral and social psychology. The literature is so well summarized and the insights so compelling, that I need simply to summarize Jonathan Haidt’s book “the Righteous Mind” to demonstrate the second most important theme, that of why we are “groupsish”
T - Righteous Mind
We are obsessively concerned with what others think of us, although most of this is invisible to us.
We are able to lie and cheat often tand the cover it up from even ourselves. Reasoning can take us to almost any conclusion we want to reach, because we ask “can i believe it” when we want to, but “must i believe it” when we don't want to. The answer is almost always yes to the first question and no to the second.
In moral and political matters, we are often grousigh rather than selfish. We deploy our reasoning skills to support our team, and demonstrate commitment to our team
107 - the worship of reason is ...a delusion
Human life is a series of opportunities for mutually beneficial cooperation. If we play our cards right, we can work with others to enlarge the pie what we ultimately share.
P162 - famous social psychology experiment, rattlers and the eagles. Believed they were alone, did many things would expect of the group, created norms, songs, rituals and distinctive identities (rattlers never cry, eagles never curse). One discovered each other, performance in all activities (tent pitching, baseball, etcl) was entered into with more zest and efficiency. Tribal behavior increased dramatically. Both sides created flags, then they destroyed each other's flags, raided and vandalized each other's bunks, called each other nasty names, and made weapons (socks filled with rocks).
Chimpanzees guard their territory, raid the territory of rivals, and if they can pull it off, kill the chimps and take their territory and their females. It appears that warfare had been a constant feature of human life since long before private property for millions of years, our ancestors faced the adaptive challenge of forming and maintaining coalitions to fend off attacks from rival groups. We are descendants of successful tribalists not their more individualistic cousins.
Many psychological systems contribute to the effective tribalism and success in inter-group competition.
Like many of modern day org theorists, Haidt admits he started grad school with the idea that hierarchy = power - exploitation = evil. But when he began to work with Alan Fiske, he discovered that he was wrong. Fiske shed that people who relate to each other in the “authority ranking” way have mutual expectations that are more like those of a parent and child than those of a dictator and fearful underling. THey are based on perceptions of legitimate asymmetries, not coercive power, they are not inherently exploitative (168, reference original work by Fiske, 32 is footnote)
This foundation is complex as you must look in two directions - up toward superior and down toward subordinates, these modules work together to help individuals meet the adaptive challenges of forging beneficial relationships within hierarchies. We are the descendants of the individuals who were best able to play the game - to rise in status while cultivating the protection of superior and the allegiance of subordinates. (Pg 168 footnote 33)
I am not sure I can do a good enough job of summarizing the central thesis of Haidt book, but in his words it is “innateness as organized in advance of experience. Pg 178 - summarizes chapter.
Pg 273 Hives at Work
From cradle to grave, we are surrounded by corporations and things made by corporations. What exactly are corporations, and how did they come to cover the Earth? The word itself comes from corpus, altin for body. A corporation is quite literally a superorganism. Here is an relay definition from Stewart Kyd’s 1794 Treatise of the Law of Corporations
“A corporation is a collection of many individuals united into one body, under special denomination, having perpetual succession under an artificial form, and vested, by policy of the law, with the capacity of acting in several respects, as an individual.”
This let people place themselves into new kinds of groups within which they could labor, suppress free diding, and take on gigantic tasks with the potential for gigantic rewards.
Haidt earlier explains the difference between the moral philosophers perspective on Homo econom
It is technically possible to build a corporation and staff it entirely by Homo economicus and put the carrots and sticks to motivate self service employees to act in the way the company desires. This approach has limits, self interested employees are glaucionians, far more interested in looking good and getting promoted than helping the company,
In contrast, an organization that takes advantage of our hive nature can activite pridel, loyalty, and enthusiasm in employees and monitor them less closely ,THis generates more social capital and the bonds of trust that help employees get more work done at a lower cost than employees at other firms. Hivish employees work harder, have more fun, and are less likely to quit or sue the company. Unlike Homo economicus, they are truly team players.
What can companies do to create more hivish organizations?
(note about not focusing on leadership, interesting study pg 276)
Leadership can only be understood as a compliment of followership. Focusing on leadership alone is like trying to understand clapping by studying only the left hand. THey point out that leadership is not even the most interesting hand. It is no puzzle to understand why people want to lead. THe real puzzle is why people are willing to follow. These scholars note that people evolved to live in tropus of up to 150, and also evolved the ability to rally around leaders when our group is under threat or competing with other groups. Remember the rattlers and the eagles instantly become more tribal and hierarchical the instant they discovered the presence of another group? Research shows that strangers will spontaneously organize themselves into leaders and followers shen natural disaster strike. (48 footnote, page 276)
People are happy to follow when they see that their group needs to get something done and then the person that emerges as the leader does not activate their hypersensitive opression detectors.
A leader must construct a moral matrix based in some way on the authority foundation to legitimize the authority of the leader, the liberty foundation to make sure ath subordinates doens feel oppressed, and dont want to band together to oppose a bullying alpha) and avove all the loyality foundation which I defined in CH 7 as a response the the challenge of forming chesie coalitions. (276)
How to create more hivish, happy and productive organizations.
1 - increase similarity not diversity - celebrate groups share values and common identity. You Can make people care less about race by drowning differences i s asea of similarities, shared goal, and mutula interdependencies (51, page 277)
2 - exponent synchrony (all blacks Haka)
3 - create healthy competition between teams, not individuals. Intergroup competition increases love of the in group far more than it increases dislike of the out group.
BUT BITTING INDIVIDUALS AGAINST EACH OTHER FOR SCARCE RESOURCES WILL DESTROY HIVISHNESS, TRUST, AND MORALE
Kaiser and Hogan summarize research literature (54) pg 278
Good leaders create good followers, but followership in a hivish organization is better described as membership
We are homo duplex
Oxytocin bonds people to their groups, mirror neurons help people emphasize with others, but particularly those that share their moral matrix. Love within groups, amplified by similarity a sense of shared fate, and the suppression of free riders, my be the most we can accomplish (284)
Definition of the moral system on 314 could substitute corporate systems - “interlocking sets of values, virtues, norms, practices, identities, institutions, technologies, and evolved psychological mechanisms that work together to suppress or regulate self interstate and make cooperative societies possible. (66)
Friendships and social contacts across party lines became discouraged in the 1990’s. Once the human connections were weakened, it became easier to treat members of the other party as the permanent enemy rather than fellow members of an elite club. As one elder congressman put it “this is not a collegial body any more. It is more like gan behavior. Members walk into the chamber full of hatred” (5)
Poster on 320, we are losing our competitive edge because of the disunity between conservatei and liberal groups, similarly this dynamic occurs, abit at a smaller scale, within large organizations.
Haidt (talks call it T(a))
T (a) Haidt
First truth, that intuition come first, strategic reasoning second
mind is divided into parts that sometimes conflict
Plato Western philosophy, reason trying to control baser passion, charioteer, need them to pull the horses, if a man can strengthen his reasoning and control passion, will die and go back to greek gods, and if he fails he will become a women
Hume - retice of human nature - reasons are and ought only to be the slave of the passions and can pretend no other office than to serve and obey them.
Drive reasoning forward, send it out to find evidence for what we want and come back with rational for passion
Difference between can and must - tom gillivich, why to people believe in weird things - when we want to believe something:
1 - Can i believe it. Use our reasoning to go out for evidence.
2 - Must i believe it?
Moral - water we swim in
A tribal morality for small hunter gatherer groups that were consistently in conflict with each other.
While we are all moral creatures, we are easily manipulated by others.
When you are judging someone else, you are locked in your moral matrix, that seems totally compelling to you. And someone else is in a totally different network. Lots of subgroups within the same system are less tolerant.
We can best limit intolerance of difference by parading, talking about, and applauding our sameness...ultimately nothing inspires greater tolerance from the intolerant than an abundance of common and unifying beliefs, practices, rituals, institutions and processes. Karen Strener, the authoritarian dynamic.
Humans are tribal primates evolved for life in small fission-fusion societies with intense animistic religion and violent intergroup conflict. We are unsuited for life in large diverse secular societies, unless you get a certain setting “finely adjusted to make possible the development of stable political flief” E. O Wilson
But today, regardless of our religious affiliation, most of our adult working lives is associated with large diverse WORK environments
Trick to changing people's minds, first get them leaning your way. Argument couched in metaphors and rhetoric, reason must follow intuition not the other way around
Open heart first, then reason can get in
What to do to encourage more civil dialog -
Look at simple social nudges to resolve. Situational pressures, how to take all the flaws of human nature and design organizations - people are always concerned about their reputation, so how do we set things up so that people will guard their reputation
What are the conditions that create tribal behavior?
Correct each other's flawed thinking in groups, if we can dis confirm the confirmation bias, if they are friends, institutions as ways we have developed that correct or cancel out our flaws. Attitudes change not because the logic is now understood, its because you get used to it. It looses shock or disgust value, take intuitionist view, speak to the elephant not the rider, then the rider will come along.
Concept of deservingness, automatic quick rapid punishment, get behavior change.
Equality violates equity. (liber/conservitive)
If you are partisan you cannot think integratively, with the complexity that integration requires.
You win by making other people better off.
Value bring to organizations, rapidly understanding through both experience and science, the organization design elements that create the existing climate, the challenges that must be solved to reach the organization's purpose, and to effectively redesign these elements to make work a better place.
Look at outcomes.
Passive aggressive organization, neilso, gary, pasternack, bruce, and van nuys, Karen
Unclear scope of authority, misleading goals, agreement without cooperation, ineffective motivators, unclear decision rights, wrong information, misleading structure
The challenge with the models and the supporting evidence is that the researchers are mixing concepts, and the lack of a consistent frame leads to a variety of conflicting conclusions about how to effect change. This is best evidenced when the authors each conclude with a lackluster set of interventions to move us from the current paradigms we are organized into in some of these future utopia states. We go from humans as entangled to enlightened by such interventions as better delegation, more cross functional governance, and improved team building. These interventions, while not necessarily wrong, gloss over the true complexity of creating context in organizations that delivers on the aspirations that formed the entity in the first place. And the majority focus on individual or small team interventions as a way to address the enterprise issues, which leave out the system unit of analysis entirely. Simply saying at the end we should “foster an enterprise mindset” (CFG and Aaron) misses the entire point that the context we create is what is creating and sustaining the mindset of the individuals and groups within.
Another mis step in organizational design literature is the notion that “culture” is one of the variables that can be manipulated to create a different employee experience. Culture is by definition the observable collection of all the choices that are made, the outcome of the design that provides the experience. In fact, climate is a much more accurate word to describe both what we can create as well as what we can measure in organizational life.
What is most striking about the solutions that are recommended for transforming to the workplace of the future is how they are largely focused on individual and group interventions. When in fact, it is the pattern of the whole system that has predictable consequences for how we experience work and relate to one another. In order to implement change, we must design the whole system and understand the dynamics of the different layers of the organization based on the context we create, as Oshray says in his book on Context, “So I feel the way I feel about you or your group not because of who you are but because we are apart, and if we integrated in some meaningful way I would feel very differently about you and/or your group” . (Pg 75 of Context”
(INSERT FIGURE WITH CONTEXT AND CULTURE INPUT AND OUTPUT PER DRAWING)
The Model Details
Before I dive into the details of my proposed model, I would be remiss if I did not summarize the most well known org model of our time, the “STAR” model originally developed by the late, greate Jay Gailbraith who I had the honor of seeking speak in the early days of my consulting career.
Within your organization model choices, you have these three layers at your disposal, and there are four main ways to intervene at each of these three layers.
Individual - there are four distinct choices that must be carefully considered at the individual level of design
At indv unit of analysis (work, roles, autonomy, mastery), focus on motivation my creating context that meets needs and wants of indv autonomy, on mastery by developing integrative thinking skills, on meaningful work and on multiple roles (morningstar example)
1 - Work
The Role of Technology in Facilitating New Models of Collaboration
C - The most exciting breakthroughs of the twenty first century will not occur because of technology, but because of an expanding concept of what it means to be human (John Naisbitt, pg 43)”
I would attribute much of the momentum to reexamine organizational life to the changing nature of work, largely based on technological advancements.
The tasks that must be executed to get the value to the end user can be grouped into roles in many different ways. In our example above, if your desired outcome is to have an efficient delivery of a world class product, you will group the production tasks in efficient chunks for each of your production roles. However, in our customer segment example, the commercial and retail will have both production and customer service tasks within a single role.
F - Understand what your people do, reinforce generators, increase the total quantity of power, increase reciprocity, extend the shadow of the future, reward those who cooperate
Behaviors are the solutions people find to deal with their problems and achieve their goals, give the resources and constraints they encounter in their work. The mechanisms - structure, procedures, incentives, etc - are really only either resources or constraints that employees use or sidestep to achieve their goals. Performance is a result of what people do, their actions, interactions, and decisions.
2 - roles
In deloitte.consulting - 5 layers, large bands, multiple roles/hats, most people are market facing. Why then does every SM and PMD hang onto titles? Introduce self with some impressive title that is totally meaningless.
A role is the part played by a person in an organization. Roles should be guided by the operating model decisions. For example, if the decision was made that the winning characteristic of the organization was its ability to deliver efficient production of a single product with great service you may have a set of roles focused on production, and a seperate set focused on customer service. Alternatively, if your core competency is to deliver customized solutions to unique customers, there will be roles based on customer segments. This might lead to groups of roles focused on commercial customers, and a separate one focus on retail consumers.
C - Pg 127 - Parker Palmer - Despite the American myth, i cannot be or do whatever I desire...Our created natures make us like organisms in an ecosystem: there are some roles and relationships in which we thrive and others in which we wither and die”
C - Pg 114 - role definition and allocation, morning star example, you may hold 20 different roles, for each one you specify what it does, what authority you believe it should have (act, recommend, decide, or a combination), what indicators will help you understand if you are doing a good job, and what improvements you hope to make on those indicators. You then negotiate these contracts upstream and downstream individually so that you can commit to those that are next in the chain and that you have the commitments from those before you in the chain.
Picture of the network of agreements between people, network node map. They don't have an org chart, just this. One could argue that every organization's real structure looks like this. An intricate web of fluid relationships and commitments. The people engage in to get their work done. Org hierarchy sits so easily, distorts more than helps the real work going on in the web of relationships underneath.
G - Integrative roles - How to manage complex adaptive systems must be able to understand and exploit the link between local behaviors and macro-outcomes and use the right leverage points to allow global change to emerge from local actions. They must also manage the conflict of interest between the system’s multiple levels.
There are a wide variety of choices associated by the type of talent you will employ to deliver the work in role. The first and most traditional option is to hire a full time individual to perform the tasks in the role you have designed. You will determine what competencies result in the optimal performance of these tasks in role and hire accordingly. Alternatively and much more frequently, companies are looking at part time, consultant, contractor, and gig workers to perform roles or
parts of roles. These decisions should be based on the enduring nature of the work, how germaine the work is to the core competency, and how available the different sources of talent are in the ecosystem.
3 - Autonomy
The problem with many org theories is that they downplay the role played by the human agent – that stubborn, unpredictable human actor – who has the power to direct the organization.
The way in which individuals in organizations make choices is how they come to find themselves within a particular context in the first place
C - Pf 124 - when people have the decision making power and the resources to work toward a meaningful purpose, they don't need pep talks or stretch targets.
F - The difference between autonomy and self sufficiency. Autonomy is about fully mobilizing our intelligence and energy to influence outcomes, even those we do not entirely control. Self sufficiency is about limiting our efforts only to those outcomes that we control completely without having to depend on others
Autonomy is essential for coping with complexity, self sufficiency is an obstacle because it hinders the corporation needed to make autonomy effective.
Balance of centralization and autonomy Organizations have always struggled to balance
centralized control with individual autonomy. On one side lie the back-office policies and support systems that govern how work is done. These systems may be mandated by leadership or required by law, and they often are designed to make the organization more efficient—an increasingly important goal in tough economic times. On the other side sit knowledge workers, equipped with skills and expertise developed through years of experience. These managers and frontline employees understand the importance of process, but they bristle under too much top-down discipline. They want the freedom and flexibility to create their own processes (and
they don’t hesitate to bend the rules when necessary to perform their jobs effectively). An organization’s inability to properly funnel that tension has many potential downsides; too much centralized control, for example, can inhibit innovation, or make it difficult to retain top talent. Study after study shows that the more employees feel empowered, the more productive they tend to be. Too much autonomy, however— as leaders of IT, finance, HR and other back-office functions will argue—can drive up costs (and risks) and quickly erode profits. Every organization strives to find its own balance between flexibility and control. But there are a few general principles that any management team can follow to discover the proper balance. Some may seem counterintuitive. Knowledge workers may have to give up a little control in order to get more flexibility and freedom.
Historically called training and performance management, todays focus is on developing the workforce to improve overall performance. Traditional performance management is well detested construct that we have all learned to hate. Annual paperwork, a quick discussion on the things that you did wrong some time ago that you no longer have the opportunity to correct, followed by lofty goal setting documents that are never glanced at again. Today's focus is on gaining skills, experience, and feedback on an ongoing basis to improve the individual's ability to perform the tasks in their role and potentially expand or change roles based on these improvements.
Group - at the group or team level, there are a corresponding set of choices that must be made:
S - Solutions that concentrate on groups, fail to take into account the real nature of employment systems. People are not employed in groups. THey are employed individually, and their employment contracts - real or implied 0 are individual. A traditional FTE has a contract that is ongoing, holding them accountable for doing work in exchange for payment. Thus, to make them function properly, it is essential to place the emphasis on accountability for getting work done.
S - Authority is a secondary issue and forms accountability in the sense that there should be just the amount of authority needed to discharge the accountability. So, if a group is to be given authority, ist members must be held accountable as a group, unless this is done it is very hard to take this so-called group decision seriously.
S - If the manager, or ultimately the CEO, is help accountable for outcomes, then in the final analysis he or she will have to agree with the group decisions or have the authority to block them. Which means that the group never really had decision making power to begin with. So in the long run, group authority thought group accountability is dysfunctional, and group authority with group accountability is unrealistic, for if a group does badly the group is never fired.
Interactions (need to align J more appropriately)
“Organizations face a dilemma. They must interpret the confusing, complicated swarm of external events that intrude upon the organization” (p1). Inside the organization, more confusion arises. Department’s pull against each other to attain diverse goals and to serve unique constituencies (Lawernce and Lorsch, 1967). Divergent frames of reference and goals generate disagreement and uncertainty. In response, leaders must impose structure and provide guidelines for members. V - Organizations as Information Processing Systems. Dart, Richard L, Lengel, Robert H. (1983) Department of Management, Texas A&M University
Organizational structure based on optimal coordination of interactions among activities.
J - As groups grow, it becomes impossible for everyone to interact directly with everyone else. If maintaining a connection between two people takes any effort at all, at some size that effort becomes unsustainable. You can see this phenomenon even in simple situations, such as when people clink glasses during a toast. In a small group, everyone can clink with everyone else. In a large group, people touch glasses only with those near them. Similarly as fred brooks noted in his book the mythical man month, adding more employees to a late project tends to make it later, because the new workers increase the costs of coordinating the group. Because this constraint is so basic, and because the problem can never be solved, nooy manages, every large group has to grapple with it somehow. For all of modern life, the basic solution has been to gather people together into organizations.
J - Our basic human desires and talents for group effort are stymied by the complexities of group action at every turn. Coordination, organization, and communication in a group is harder and gets harder as the group grows. That means whatever methods help coordinate group action will spread, n matter how inefficient they are so long as they are better than nothing. (45)
The common organizational structures we have today are simply the least bad fit for group action in an environment of high transaction costs.
J - Our electronic networks are enabling novel forms of collective action, enabling the creation of collaborative groups that are larger and more distributed than at any other time in history. The collapse of transaction costs makes it easier for people to get together and this is changing the world. The change can be looked at as one long transition unfolding at different speeds in different contexts - the transition can be described as the answer to two questions - why has group action been limited to formal organizations and what is happening now to change that?
J - We now have communication tools and social patterns that are a better first or our native desired for group efforts. We can now earth beneath the Coasean floor, we can have groups that operate with a birthday party informality and a multinationals scope. With collaborative production and collective action, some collective decisions must be made. Whenever a decision is taken on behalf of the group, at least some members wont get their way, and the bigger the fourp, or the more decisions, the more often this will happen. FOr a group to take collection action, it must have some shared vision strong enough to bind the group together despite periodic decisions that will inevitably displease at least some members
J - Communication tools don't get socially interesting until they get technologically boring. The invention of a tool doesn create change; it has to have been around long enough that most of society is using it. Once the change is so pervasive its invisible, then profound change happens.
1 2 - processes/interactions
Rework by jason fried and david heinemeier hansson “policies are organizational scar tissue”.
A series of actions or steps taken in order to achieve a particular end. Describe the way the hand offs of work will occur between the roles. Move decision and information along an end to end flow.
2 - membership (motivated reasoning)
T - Within every society people have different visions of what capitalism looks like. As a social psych, you can't convince people on moral and political issues by giving them facts. BECAUSE human reasoning does not take place in a logical world based on facts, but an emotional world based on stories.
C - “When you change the way you look at things, the things you look at change” (pg 41, Wayne Dyer
Sense of belonging
F.- Multiplicity - create networks of interaction
Third way to reinforce rich objectives that increase reciprocity is to make sure people belong to multiple networks that complement each other.
Game theory - shadow of the future, importance of what happens tomorrow as a result of what we do today. Axelrod's thinking on the evolution of cooperation.
Q - Santiago theory of cognition, Humberto, beautiful way to appreciate difference between the cognition of the machine and of us as living systems. Essence is humans do not perceive their reality. We do not passively take in data from the world and record it like a machine. We do not perceive the world we see, we see the world we perceive. Sales person perceives a different world than an engineer. (i will believe it when i see it, but actually you see it when you believe it). Profound insights into how we work with each other. Different systems with different realities interacting - conflict. When one human being tells another human being what is real, what they are actually doing is making a demand for obedience. I have a privileged view of reality, and it is my job to correct you.
Q - Systems are about interdependence. Our interconcednesses has gone up and our ability to understand it has gone down, as our teacher was historically nature, but we have innate capabilities to understand system interdependence.
Motivated Reasoning or While Work feels like Work
Why is it that organizations change people more than people change organizations? Particularly when organizations are just a collection of people?
No matter where you look at org solutions, hard or soft, does not explain change of people's behavior
Hardening of the attitudes.
I - Individuation can stimulate differentiation. How sour being separate from one another can enable our differences to grow. Staying separate and apart supports the growth of our differences. Second, integration supports homogenization. Point is that the pattern of whole system processes have predictable consequences for how we experience and relate to one another. There is something both troubling and exciting in understanding this, that our experiences of one another are not as rock solid as we like to believe
I feel the way I feel about you or your group not because of who you are but because we are apart, and if we integrated in some meaningful way I would feel very different about you or your group. (pg 75)
I - How are we individualized? How are we integrated? How differentiated or homogenized?
Ideally, each group is zestfully individuating. operating as their full selves, taking risks, experimenting, using unique potential in service of their system.
I - Also each system is zestfully integrating. Members within each system are regularly joining together in various configurations, working together , actively sharing information, feeding and supporting one another, coaching one another in the service of whaterr enterprise initiatives they are working on.
I - Trick is to understand the various ways to balance these processes and the intensity and mindfulness with which they are expressed.
I - “People are taking personal issues that are not personal. They go with the territory. And once you deeply understand the territory, you can change the experience” (p85)
I - As the top system becomes more differentiated and individualized, tops burrow into this respective territories, members fall in to a “mine” mentality, becoming protective and defensive of territories and acting in protective and defensive ways, for example, preventing other tops from interfering in their business, sharing information, (DISNEY - mine mine mine) Pg 93
“Our consciousness is at the mercy of the patterns we have fallen into.” 93
I - Tops become vulnerable to certain relationship tensions and breakdowns. It is important to note that these relationship issues are the consequence of the system, vulnerable to issues around relative significance, who are the more or less important members in the top team. (pg 94) Tops in their differentiated individuated territories tend to create silos through the system, resulting in the build up of redundant and costly resources, conflicting and consuming messages being sent through the system, system members torn by conflicting loyalties, important information getting lost in the cracks, loss of potential cross system synergies, and the territoriality reinforcing the disintegration of the middle of the organization. (95)
I - From personal to systemic, the experience feels specific to particular people and circumstances, but what we are experiencing is a pattern that occurs regularly in systems like ours. Changes the intervention. If you are an individual, you change people - ourselves, others. If it's a system, we change the pattern and our experience of the people will change. (99)
I - All the conditions of the system are “tearing”, one that draws managers away from one another and out toward the individuals and groups they are to lead, manage, supervise. Here is a fine collection of people, selected and promoted based on their abilities and performance track records. Each has her specific area of responsibility. They do not experience themselves as a system, yet they are one with potential to contribute to success of org. Consequence is there is lack of coordination between system parts,feelings of unfairness arise stemming from uncoordinated and uneven actions (how come that group got computer upgrades, casual fridays ,paid holiday party...and we didn't’?)
I - Change does not come by fixing, firing, replacing, or retraining the people, it comes from changing the pattern.
T - P172 Role of groups in evolutionary thinking. Gave us a set of tribal instincts. We love to mark group membership, and then we cooperate preferentially with members of our group.
Hunter gatherer, quantum leap in moral matrices, people lived in much denser webs of norms, informal sanctions, and occasionally violent punishments. Those who could navigate this new world skillfully and maintain good reputations were rewarded by gaining the trust, corporation, and political support. This is the liberty foundation. Liberty foundation operates in tension with the authority foundation. We all recognize authority in some situations, but we are also wary of leaders who claim this right before they have earned our trust.
Empowerment (decision rights for group)
Story about Joe U - He seems like a reasonable guy, just call him
M - “If small groups are included in the decision-making process, then they should be allowed to make decisions. If an organization sets up teams and then uses them for purely advisory purposes, it loses the true advantage that a team has: namely, collective wisdom.
Decision making happens through conversations either one on one, with teams, or in cross functional groups. Unfortunately, many decisions making conversations end up as free for all, with people talking at cross purposes, sharing information haphazardly, and covering the same ground over and over without coming to any conclusions. Decisions are far more successful when they’re focused and equipped with a process to guide them through their conversations.
Company’s find that it costs them more to tolerate traditional hoarding than to promote exchange.
Hierarchy’s power to coordinate arises from the pattern it imposes on personal communication. Management is the critical human path for lateral information flow across sequentially dependent tasks.
The grand trade off of hierarch (coordination in exchange for suppressed lateral communication) breaks down and information flow expands.
A new rule of thumb p decisions move as close the the point at which the action is required, subject to availability of data and experience to make them. TH old rule – decisions rise to the level at which experience and data can be found is too slow
F - A stupid maching - from strategy to structure = strategic alignment. A linear sequence that ties us into knots. Example of front office in charge of customization and back office in charge of standardization. Friction is caused by these two different objectives, so machines create a middle office. Now the HR department, as an example, is charged with creating training, incentives, and career paths for the mi office, who are disengaged. THey don't ask “why do we need a middle office in the first place?” they instead try to find ways to improve the leadership style of the mid office manager.
Yes, org must be in service of the strategy, but it is also true that the organization because of the way it's designed determines the very content of the strategy, let alone its execution.
TIF Note - i call this the sumersault strategy - understanding that our context drives our behavior which directs our choices which creates the strategy that we must then execute in the context we create…
N - the group of authors point out that hierarchy is out, and self organization is in. However, when you look more closely for examples of this, it is hard to find companies who actually self organize. Sometimes we see less management layers. Sometimes we see teams that can decide how to organize their roles and resources to get specific outcomes accomplished. And sometimes these teams are able to set their own objectives and rewards. However, these teams all exist within some defined hierarchy. When decisions must be made quickly, when knowledge is concentrated at the top, and when several business decisions need to be coordinated at the enterprise level, the value of hierarchy is evident (A). And lets not forget the top management set the rules that guide the types of self organizing being done (A).
M - “Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.”
F - Don't think of organization design as structure, processes, and systems... Instead think of organization design in terms of power bases and the resulting capabilities. Capabilities are concrete behaviors, embedded in people with power and interest to do something.
F - What do we want our organization to be able to do tomorrow that it can't do today? Who needs to have power to achieve these goals, and how will we provide it to them? Pg 1294
Interdependence destroys accountability. We often hear managers say things like “how can I be held responsible for results that depend on the performance of others?” the third misconception is that we can be accountable for our work only if we are the sole authority over it and can control all the resources necessary to accomplish the task. But it is possible for a person to be accountable without having exclusive control over the resources needed to deliver, as long as others who partly control those resources are co-operate. NOTE corporation and cooperate - play on these words here
4 - performance
Demming - people with targets and jobs dependent upon meeting them will probably meet the targets even if they have to destroy the enterprise to do it.
Get what you measure.
Variability within organizations easily dwarfs the differences between competitors. The only way to manage that variability and improve local performance is to provide feedback at the level where behavior originates – the level where employee spends most of their time. Local performance variation is a scourge to organizations that aspire to high performance.
L - ch 7 organizing business world, 268. There are things that managers can do to improve productivity, based on recent findings in neuroscience and social psychology. Some are obvious and well known, such as setting clear goals and providing high quality, immediate feedback.
Expectations need to be reasonable or employees feel overwhelmed. Individual productivity is directly related to job satisfaction, and job sat in turn is related to whether employees experience that they are doing a good job in terms of quality and quantity of output. There is a brain area called area 47 no larger than your pinky, just benign your temples. Contains prediction circuits that are used in conjunction with memory to form projections about future states of events. If we can predict some, but now all, aspects of how a job will go we find it rewarding. If we can predict ALL aspects of the job, it tends to be boring: we function best when we are under some constraints and are allowed to exercise individual creativity/autonomy within those constraints.
F - Rich objectives - collective output objectives define the ultimate value the organization wants to deliver. The achievement depends on the interactions of multiple individuals and work units. Individual input objectives define the inputs that the individuals contribute. Overlap objectives define what a person does in their area that increases the effectiveness of others in their own roles
F - One way to tighten feedback loops by having people interact more frequently with others whose work is affected by their actions. Lack of cooperation backfires faster when the feedback loop is tighter. Aligns to axelrod duration increase - period which interactions take place and people bear the consequences of their cooperation), tie futures together
F - In our experience, complexity can only be addressed by people using their judgment in the moment. People's autonomy is therefore essential to deal with complexity. It is equally necessary for people to cooperate with each other, and the proliferation of metrics and incentives at the individual level actually obstructs the kind of cooperation necessary to deal with business complexity. The six simple rules are based on the premise that the key to managing complexity is the combination of autonomy and cooperation.
H Andy Groves high output management
Metrics - train your team to select a small number of objective, quantifiable measures of output, with leading and trending indicators, that can be reviewed daily and help transform a business for the better, avoid measures of activity.
U Holding a specific goal affects the information processing strategies used to make judgments and decisions. Information is processed in such a way that allows the decision maker to believe the goal will be attained. As a result, information that supports a goal is given greater weight in the judgment process, while information that suggest a goal will not be reached is discounted.
Imagine a company puts a premium on innovation, asking its employees to brainstorm new ideas before determine which option show the most promise. How will early commitment to one idea affect how the team test their theories about the variability of all the alternatives. Will they try to confirm their initial preference, or will they remain open minded? - Confirmation bias, one of the largest and most pervasive flaws in human reasoning. The desire to maintain beliefs, or confirm an existing hypothesis continues to affect judgment after information is discovered leading to patterns of information recall and interpretation in ways that support a desired conclusion. This is termed motivated reasoning, affects the strategies used to assimilate and judge new information and determines what information is considered relevant. Leads decision makers to heaving weight information that supports the desired conclusion and discount information that contradicts it p2
System - finally, and the macro level there are four choices that must be made:
Deming “94% of problems in business are system driven and only 6% are people driven
1 - - hierarchy
A - Aaron calls this flow (find page number)- is the way your teams are structured reflective of the way your organization actually creates value. If not, you are in for a world of hurt. YOur sales team is waiting on your markets, who are waiting on your product people who are waiting on the engineers, etc. Take a project - trace the line of who needs to be involved to create the value, by skills or roles or people whatever is easier, now compare that network with the org chart that represents where people sit day to day. How many teams does it touch? What is the cost of those handoffs? In ownership, speed, and coherence? In an ideal state, your day to day value creation structure, where people spend their time physically/virtually, and your workflow are one and the same.
D - Central services “org shop” has HR, legal, admin and “info shop” has Finance, IT, supply chain
Cultivate principles not rules
Decentralize as much as possible
Individuals have a portfolio of roles
Leadership means working the system, not the people
J - We use the work organization to mean both the state of being organized and the and the groups that do the organizing our the typical organization is hierarchical with workers answering to a manager and tha manager answering to a still higher manager and so on. The value of such hierarchies is obvious - it vastly simplifies communication among the employees. New employees need only one connection to their boss, to get started, that's much simpler than trying to have everyone talk to everyone. running an organization is difficult in and of itself, no matter what its goals. Every transaction it undertakes, every contract, every agreement, every meeting - requires it to expend some limited resource: time, attention, or money. As a result, no institution can put all its energies into pursuing its mission; it must expend considerable effort maintaining discipline and structure, simply to keep itself viable.
Self preservation of the institution becomes job number one, while its stated goal is relegated to number two or lower, no matter what the mission statement says. The problems in hernet in managing these transaction costs are one of the basic constraints shaping institutions of all kinds.
J - It is tempting to assume that central control is better than markets for arranging all sorts of group effort, (indeed, during the twentieth century much of the world lived under governments that made that assumption) but there is a storm limiting factor to this directed management, and that is the cost of management isself. Hackman, Harvard professor of psychology studied the
size and effectiveness of work gopur sin Leading Team. tells the story of a man who ran a non-profit whose board numbered fourty. When asked what he thought such a large board could accomplish, he replied “nothing” in a way that implied he liked it that way.
J - Whenever transactions costs become too expensive to manage within a single org, markets outperform central management/firms.
J - The structure of traditional managerial oversight is often illustrated by an org chart, a diagram of the official hierarchy. This is the simplest view of an organizational reporting structure, diagriming both responsibility and communication flow. Compared to the chaos of the market, the char draws clear and obvious lines of responsibility, and it is that very clarity that allows the firm to outperform a pure market for work.
J - The org chart is like institutional wallpaper - ubiquitous and not terribly dramatic. Its funny to think of it as a specific invention, but its existence owes much to the 1800 railroad environment where it was originally used. Part of Alfred chandler managerial method document in the visible hand, which may have diagrammed the first commercial org char in history.
J - In addition to revolutionizing management structure, McCallum wrote six principles for running a hierarchical organization. Mose are what you expect “proper division of responsibilities” but # 5 is to produce such information to be obtained through a system of reports and checks, tha will not embarrass principal officers nore lessen their influence with their subordinates. If you have ever wondered why so much of what workers in large organizations know is shielded from the CEO and vice versa, wonder no longer the idea of limiting communications, so that they flow only from one layer of the hierarchy to the next, was part of the design of the system at the dawn of the management culture. Pg 43
J - When an organization takes on a task, the difficulty of coordinating everyone needs to be reined in somehow, and the larger the group, the more urgent the need. The standard, almost universal solution is to create a hierarchy and to slot individuals into that org by role. The individuals in such an organization have to agree to be managed, which is usually achieved by paingthem. An organization will tend to grow only when the advantages that come from directing work of additional individuals are less than the transaction costs of managing them. At some point, an institution simply cannot grow anymore and still remain functional, because the cost of managing the business will destroy the profit margin. You can think of this as the cosean ceiling, however if costs fall moderately, then firms can increase in size (so the upper limit of the size of a company is inversely related to management costs)
G - We consider five ‘activators’ that companies need to attend to in order to achieve a design that not only enables the business strategy, but also works effectively in practice. They are: a. Making sure that each layer in the structure is uniquely value-adding, thereby reducing complexity and speeding up decision making. b.Creating innovation and execution networks to enable collaboration and build agility into the design. c. Designing business handshakes that set interlocked plans between key players in the matrix, and define what results will be delivered and how. d.Defining power, governance and decision making mechanisms that strike the right balance between global, local and functional influence” (pg 7)
H - Enterprises - as org grow speed decreases while leverage increased. Complexity increased as does duplication and redundancy. Decisions are constantly being made on whether to centralize for consistency or decentralize for speed. FUnctional teams increase leverage, mission oriented teams increase speed. The tradeoff is increased complexity and delay in manaign requests from the BU’s, in contrast, mission oriented organizations are decentralised and pursue objectives largely independent of other parts of the enterprise, trading off leverage for closer proximity to customer and faster time to rest “speed is the only benefit to mission oriented organizations, in all other cases functional organizations are superior”.
L - A flat structure encourages people to work together and allows for overlap in effort, often empowering employees to do what needs to be done and apply their talents outside formal command or task structure. A drawback of a flat structure is that there may be only one person who has effective decisions and that person will have too many decisions to make. Some form of vertical structure is essential to achieve coordination among employees and their projects, to limit duplication of effort, and to ensure coherence across different components of an output. Principle of minimum chain of command states that the org should choose the fewest number of hierarchical levels possible.
Have you ever been in a position where you needed help, but you did not know who to ask? Perhaps you were shopping and you had a question about a product, but you didn't know who could help you?
Well, in a business not knowing who to turn to when there is a problem can be a disaster. Chaos would certainly break out if every employee was wandering around trying to find someone to turn to every time they had a question. In order to keep business running smoothly, companies rely on the chain of command, where each employee knows who is in charge, from the top position all the way down to the newest intern.
P - The chain of command principle is ancient, but its application to the management of organizations was only systematized in the twentieth century. Two individuals—the French engineer and executive Henri Fayol and the German sociologist Max Weber—contributed much to our understanding of this principle. In his book, General and Industrial Management, Fayol presented what have come to be known as the fourteen principles of management. These principles include both the unity of command (his fourth principle) and the scalar chain (line of authority). Fayol's principle of the unity of command holds that a subordinate should report to one and only one supervisor. Fayol believed that this was necessary to provide the supervisor with clear position authority, and to prevent a subordinate from receiving conflicting orders. P - Fayol's scalar chain principle states that authority and responsibility flow, one level at a time, in a vertical line from the highest level in an organization to its lowest level. This line of authority establishes an organization's hierarchy. Fayol believed that it was a management error to abandon the chain of command for no reason, but he also allowed for circumstances in which the chain of command might be bypassed for the good of the company. For example, Fayol suggested that communication delays might sometimes be caused by blind adherence to the chain of command and unity of command principles, and proposed what he called the "gangplank," which allows communications outside the chain of command as long as superiors are made aware. Weber also studied the problems inherent in large organizations, as organizations grew from family structures to much larger entities during the Industrial Revolution (1760–1850). Weber proposed the bureaucracy as a model of efficient organization. Bureaucratic characteristics have clearly defined hierarchies of authority and responsibility, consistent with the chain of command principle
P - With the rapidly-changing environment and increasing uncertainty that organizations face in the twenty-first century, some adopt structures that emphasize flexibility and quick response to change. These types of organizations attempt to place decision-making authority in the organizational structure with those who can most effectively and efficiently respond to environmental imperatives. Thus, these organizations may have flatter hierarchies and communication and decision-making patterns that do not fully adhere to the chain of command or unity of command principles. In the case of matrix organizations, employees frequently have two managers or supervisors, violating the unity of command and chain of command principles. To be effective, individuals working in these organizations learn to share power, use open confrontation to resolve issues, and to utilize all directions in the organization to disseminate information. These more organic structures are not rigidly bound to the chain of command principle, although it is still an important organizing principle in most organizations.
Today, our industry’s common program/project/task/activity work orientation reduces employees to being foot soldiers thereby having minimal opportunity to provide input to management’s decision making and business growth.
An employee may report to one person for administrative purposes but the employee works for the company. Every employee is a company-wide asset that can be leveraged well beyond their immediate task. It is management’s responsibility to identify and tap into this unrealized value.
Today, employees are knowledge workers who must share knowledge and maintain their learning in order to continue to be relevant. The manner by which employees can perform these value creation processes extend well beyond the domain of one supervisor’s charge.
This is a long form text area designed for your content that you can fill up with as many words as your heart desires. You can write articles, long mission statements, company policies, executive profiles, company awards/distinctions, office locations, shareholder reports, whitepapers, media mentions and other pieces of content that don’t fit into a shorter, more succinct space.
S - The reason this is the only way to structure unified working systems with thoughts or tens of thousand of employees, is that it is the only system that permits realizing an organization's fundamental needs: to identify accountability at each stage of value adding process, to place people with the necessary competence at each stage, and to build acceptance of the structure that achieves these ends.
S - No amount of team building, attitudinal engineering, incentive planning or even leadership will have any permanent effect unless we understand what hierarchy is and hwy and how it works.
NOTE - This expectation can be built onto the network roles of the bridges and connectors
interpersonal relationships that coordinate work informally.
Rob cross, 2004 hidden power of social networks
“We learned that individual expertise did not distinguish people as high performers. What distinguished high performers were large and more diversified persona networks.
L - Org charts show reporting hierarchy very well but they don't know how coworkers interact with one another, and although they do show business relationships, they do not show personal relationships. Network diagrams were first introduced by romanian sociologist jacob ornery in the 1930.s theta re useful in understanding which employees work with and know one another, and often used by consultants to diagnose problems in structural organization, productivity or efficiency, can facilitate creating project teas or reorganizing certain functions and reporting structures. Standard practice is to split up teams that are not functioning efficiently and try to replicate teams that are. But because team efficiency isn't simply a matter of who has what skills are is more a matter of interpersonal familiarity and who works well together.
D - Because of the interdependency in organizations defining individual targets or measuring individual performance leads to deception.
D - Network roles Hubs, Gatekeepers, pulsetakers - karen stephenson, quantum theory of trust, 2005 COnnectors, mavens, salesman - gladwell, the tipping point
G - Focusing on lateral design means companies can respond quickly to strategy shifts without having to restructure every time, building agility into the organisation. • Lateral connections don’t spontaneously occur. Organisations need to be explicitly designed for lateral functioning. The networks, teams and processes that form part of the lateral organisation need to be set up and managed in a systematic way, with appropriate resources, governance and support. • Lateral structures can be temporary or permanent. They are established to carry out a particular product- or solution-development project, to commercialise a product, or to build, maintain and evolve a solution for a customer or market segment. Teams can be formed and reformed as needs dictate and as priorities and opportunities shift. (G pg 26)
G - Jay Galbraith identifies five types of lateral capability that can help an organisation to achieve the adaptability it needs to respond quickly to changes in the business environment. These capabilities sit along a continuum, reflecting the degree to which they are formalised (see Figure 10 on page 27). 1. Networks – interpersonal relationships that co-ordinate work informally. 2.Management processes – move decisions and information through the organisation in a formal flow. For example, global engineering business IMI has built consistency by rolling out a common lean management framework and common processes. “It’s less about defining policies and control processes from the centre and more about building a common mindset and agreed ways of doing things globally,” said Geoff Tranfield, Group HR Director. 3.Teams – more formal cross-unit structures bringing people together to work interdependently and share collective responsibility for outcomes. 4.Integrative roles – co-ordinating or boundary-spanning roles that orchestrate work across units. (G 26)
J - Pg 129 diagram on audience size and conversational pattern. As the audience grows large, the pattern of everyone conecte do everyone becomes impossible to support, - could parallel to roles in org
J - Pg 215 - small world network. Small world networks have two characteristics, that when balanced properly let messages move through the network effectively. The first is that small group sare densely connected. In small group the best pattern of communication is the everyone connect with everyone. In 5 people there would be 10 connections, if someone drops out the other links would not be disrupted. Second is that large groups are sparsely connected. Best is to adopt both strategis, you let the small groups connect tightly then you connect the groups. But you can’t really connect groups - you connect people within groups.
J - Instead of one loose group of 25, you have 5 tightly connected groups of 5. As long as a couple of people in each group know a couple of people in other groups, you can have the advantages of tight connection at small scale and loose connection at large scale. Networks will be efficient and robust. Small work cheats nature by providing a better than random trade off between the number of links required to connect a network and that networks effectiveness in relaying messages. Occupies a sweet spot teeenthe unbuildable and the unusable, and as a side effect is highly resistant to damage. By contrast, in a hierarchy almost everyone is critical since the loss of one persons connection disrupts communication to everyone connected through that person. A handful of people are extremely critical to holding the whole network together because as the network grows large the existence of a small number of highly connected individuals enales the very trade off between connectivity and effectiveness. Tipping point calls these people connectors, they function like ambassadors creating links between disparate populations in larger networks.
K - Pg 17 - unlike traditional organizations that rely on human capital strategies for innovation and growth, adaptive space leans on social capital strategies. Social capital can be thought of as the competitive advantage that is created based on the way an individual is connected to others. Human capital is what someone knows, social capital is about how well someone is positioned to leverage what he or she knows. Both are essential, yet organizations have overemphasized the former over the latter. Works by facilitating connections to enable information flow for Discovery, development, diffusion, and disruption. First two are represented by broker or connection network positions, second two are energizers or challengers. Brokerage is key, the bridge connections between groups sparks new ideas, connections within the teams allows to develop the idas.typically have high levels of trust, can share info quickly, makes ideas more likely to be accepted and applied. People in the network who are energizers amplify ideas across the organization. Endorsement of new solutions into the formal operations system is often the biggest challenge, happens through network closure which is the closing in around a potential sponsor of information flowing across multiple networks
2 - Transparency/Flow
"Life is like riding a bicycle. To keep your balance, you must keep moving."
— -- Albert Einstein
Internal mobility, career paths, learning cohorts,
N - A great example of this is holacracy, which is still a hierarchical structure with many non hierarchical processes, most notable in the decision making arena. Even when we are writing about cross-functional, networks of teams, we note that there are still these functional groups that organizations use to divide up the work. Even if these groups work differently than in the past and have exotic names like tripe, council or circle, they are in essence still departments ( pf 17, A)
wirearchy is about the power and effectiveness of people working together through connection and collaboration … taking responsibility individually and collectively rather than relying on traditional hierarchical status.
Flow (cite article) Finding flow: Transforming experiences, offerings and business models
When business leaders are overly controlling and protective of their resources, they risk endangering the life of their companies. Changing our management paradigm from accumulation and control to movement and sharing can reverse that trend. Organizational silos are not anomalies or aberrations or management gone bad. They are not a recent malaise or byproduct of the digital era.They are in fact just everyday examples of an approach to resource management that has been successful for millennia and that pervades all industries and all regions. So even though they do cause all the problems that we attribute to them -- including wasted time and increased friction, ineffective communications, untimely decision making, unresponsiveness, loss of business -- they're simply not going to go away just because we complain about them. “The only way we can effectively get rid of them is if we can replace the entire paradigm on which they're built, not engage in a futile and endless game of whack-a-silo.”
We like to talk about key resources as our companies' lifeblood, the most important thing we need to survive or to be successful, and yet we pay no attention to their movement. Blood by itself does not ensure life. It's the movement, the flow of the blood that counts. Our lives are absolutely dependent on flows of nutrients both inside our bodies, enabled by the circulatory system, and between our bodies and the outside world, achieved through the continuous act of breathing. Embolisms and other blockages that stop those flows cause death to tissue, limbs, organs or even to the whole organism.
If our bodies decided to try out our corporate model of resource management, and our hearts started to store blood instead of pumping it to where it is needed, and our lungs started to hold their breath instead of continually bringing in fresh resources from the outside and sharing them with the blood, we would die immediately. To exist, living organisms use pumps (lines of business or departments), a circulatory system (CRM platform) -- pulmonary, cardiovascular and systemic, filters (AI applications and analytics) and enriching environments (ecosystem and stakeholders).
Deloitte HCAP Trends stats on how hard it is to move internally vs get a new job. So why do we hoard resources in our areas of responsibility, instead of allowing them to freely move about the company? Might be seen as bad form to “poach” internally from one department to another? Might it be hard to deliver on our targets, on time and on budget, without our best resources on our teams to do and deliver this work?
Companies who have a more agile approach to hiring see their internal talent like a marketplace. Specifically, employees at risk of churning, employees who haven’t been promoted in a while despite good reviews, who report being underutilized,...etc and systematically put them on nurture tracks for new openings is a great first step for HR to take. Of course, we realize that candidates might worry about being seen as disloyal if they applied to a position outside of their department. In one company, the HR team figured out that the driver that correlated most with their high attrition rate was the lack of internal mobility. People who had had a promotion or a lateral move in the last 2 years were more likely to stick with the company. By goaling managers with the incumbents on rotation/mobility of their teams, encouraging hiring managers to widen their perspective, and openly encouraging cross-department mobility, companies can start to address this challenge, they tracked a 8x increase in internal mobility in the first year of the program, 5-10% increase in retention in most groups, and millions of dollars savedhttps://beamery.com/blog/internal-mobility
Nudging - priming, prompting, reminders (of intention), defaults
F - In some cases the bad strategy will drive the overcomplicated company to take on new performance requirements such as a wider product portfolio that it is not prepared to handle. It will produce the new products at extra cost with high levels of failure, then to stay competitive and retain customers will be forced to take remedial steps such as lowering prices. It not only does things wrong, it does the wrong things
A - Decision Discipline. Restrictions on who can make decisions, very indifferent to how decisions are made. Meetings - good example of Pixar, braintrust meetings with no authority, believe director and his or her creative team will have the best solution
M - “No decision-making system is going to guarantee corporate success. The strategic decisions that corporations have to make are of mind-numbing complexity. But we know that the more power you give a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will get made.”
4 - rewards
The way in which you incent people. Intrinsic motivation 4:1. Not saying dont pay people - try it and see how may come to work.
Comp philosophy is a critical component of your aspiration, does not get outsourced to HR (admin of it does), all decisions must be within the frame of the principles, with some CI
J - Wikipedia no effort is made to even out contributions. The spontaneous division of labor would not be possible if there ever a concern for reducing inequality. Word ecosystem is overused because large social systems cannot be underwood as a simple aggregation of the behavior of some non existent average user. Power law (128) describes a system of interacting elements rather than just collections of variable elements. Height is not a system, my height is
independent of yours. But my wikipedia use is not independent of yours - changes I make show up for you and vice versa. You can't find a representative user, instead you must focus on the behavior of the collective.
G - Focus on ‘rewarded’ complexity. Where does complexity play out most strongly in your organisation design? Where there is complexity, is it rewarded (creating connection points across the organisation in order to execute a complex strategy), or unrewarded (adding unnecessary layers, duplication etc.) (17)
Internal equity is maintained and perception of comp is procedurally just - comp philosophy, what is happening with radical transparency in comp (microsoft, glass door, coordination problems disappeared/cost of coordination 0 = collective effort to raise pay of entire MBA class based on public knowledge of incoming salary band and internal inequity it creates
All 12 of these fundamental decisions have a range of options, each with benefits and risks, pros and cons, pluses and minuses. In addition, each of these has an interaction effect, where each of the 12 decisions influences the outcome of the other decisions. The complexity of these interaction effects have never been thoroughly tested in one theoretical model. Now, with the advent of AI, we will be able to test the choices made on each of the 12 variables and actually predict based on what these factors are implemented in different organizations, which combination of choices makes for the most effective model within the business and operating context of the particular company.
An Example of Architecting for Growth and Innovation
C - We have reached a stage where we often pursue growth for growth's sake, a condition that in medical terminology would simply be called cancer (pg 29)
Christensen red team
Nick South, Partner and Managing Director, The Boston Consulting Group - From his article - for growth, some basic principles. When the growth initiative is either distinct from or disruptive to the established core, separation makes sense. This unit can then attack the opportunity with its own talent, incentives, and cadence. When the growth initiative is adjacent—and either supportive or nonthreatening—to the core, it likely belongs within the core business organization and operating model. ensure that they have processes to promote cooperation across existing business and functional units. Forums, councils, and cross-functional teams are effective mechanisms for fostering this collaboration. In meetings of these groups, all parts of the organization come together to discuss progress, reset expectations, and make course corrections. These gatherings should also provide an opportunity for teams to celebrate successes, build engagement, and find a common purpose. And, of course, they also are the place to air disagreements and make trade-offs.
These forums are too often seen as contests with winners and losers, rather than platforms for effective team building. Executives must ensure that the right people—with the right information and the right motivation—are collaborating effectively to get work done. Well-designed mechanisms can mean the difference between the success and failure of a growth initiative.
J - What is happening now is that we have tools that (TIF add - capture and visualize existing) as well as support and extend these patterns. The larger the network is, the more important the highly connected individuals are in holding the overall structure together. Small world networks operate as both amplifiers and fitter of information. This also means people don't connect at random, they connect in clusters with the same people frequently, this in turn reduces the prisoner's dilemma dn helps create social capital. Both bonding and bridging.
J - The social origins of good ideas Ronald Burt. Most good ideas came from people who were bridging structural holes, people whose immediate network included employees outside their department. Bridging these holes was valuable - bridging predicted good ideas, lack of bridging predicted bad ones. Bridging capital puts people at greater risk of good ideas than do any individual traits. “It is creativity as an import-export business. An idea mundane in one group can be valuable insight in another”. Not creativity born of deep intellectual ability. Pg 230-235 (find original reference for Burt)
J - Failure - pg 245
Overall effect of failure is its likelihood times its cost. Most org attempt to reduce the effect of failure by reducing likelihood. People will remember you saying yes to a failure more than saying no to a radical but promising idea. Given this asymmetry, you will be pushed to make safe choices,
Note open source is not an organization, it is an ecosystem, one that is remarkably tolerant of failure, it does not reduce the likelihood of failure, ti reduces the cost, it getit for free
K - There are five potential ways to facilitate discovery connections - intentionally place brokers in position, increase brokerage interactions, facilitate discovery activities, build bridges across pockets. To craft development connections, cultivate entrepreneurial pockets, enable central connectors to influence, harvest their expertise by limiting external distractions, and foster social cohesion. Successful ideas had many friends and associates, challenger sem to understand this and seed and engage the network accordingly
Hack the system with lateral relationships - create a movement.
Where should you start?
Questions to ask:
Is aspiration clear? Bus model (strategic choice cascade)
Are we grouping our capabilities in the most valuable way?
Who Should be Doing all this Architecting?
As I started with the model, I will end with the model. The first two elements of the model, purpose of enterprise and arrangement of competencies as stated will typically be don't at company inception by founder or in a going concern by CEO and executive team with input from the board and other enterprise leaders. Once these foundational choices are made (not to say that they won't be revisited, they will, and should be as ecosystem changes occur), then the architecture of the organization should be turned over to, well, the architects.
First, decide how you are going to approach the matter of shelter. Will you build one? Buy one? Rent one? Share one with others? Enter into a co-op?
Second, decide what you need to best fit your purpose. Apartment? Townhome? DUplex? SIngle family dwelling? How many rooms do you need? What will be the general purpose of each room?
THird - hire an architect and a general contractor.
Just as you would not typically undertake the design of a new construction project (unless you are a general contractor) so too should you engage experts, either internal or external, in the field of organization design. The complexity of engineering a stable foundation that can withstand the types of environmental pressures in your specific geography (earthquakes, floods, etc.) coupled with the latest techniques and trends in architecture and design would naturally lead you to hire a team of experts.
As the saying goes, you don't get a dog and then do your own barking. But that is not to say that this is not highly interactive, engaging, and interactive process that is not a once and done but a continuous evolution. Just as your architect works side by side with you to design your dream home, so too does the organizational designer. And if you have ever built a house or done a remodel, you will know that the architect is only one of the key players in getting the house built. Engineers, general contractors, and sub contractors all need to play their part in getting your dream house built.
What is organization designer role - architect and engineer
11 – Decentralized organizational structure of the FBI left information holdings fragmented into largely independent fiefdoms.
Challenging the virtues of decentralization,
Social networks allow for people to connect and coordinate with each other without a single person being in charge.
Power does not fully reside in one central location, and many of the important decision are made by individuals based on their own local and specific knowledge.
It fosters specialization, which makes people more productive and efficient. And increased the scope and diversity of opinions and information in the system (even if each individual’s person’s interests become more narrow) closer that a person is to a problem, the more likely they are to have a good solution to it.
Greatest weakness is that there is no guarantee that valuable information which is uncovered in one part of the system will find its way through the rest of the system. Sometime valuable information never gets disseminated.
What like is a way for individuals to specialize and acquire local knowledge, which increases the total amount of information available in the system, while also being able to aggregate that private information into a collective hole?
Aggregation - a curious form of centralization, is paradoxically important to the success of decentralization. If a group of autonomous individuals tries to solve a problem without any means of putting their judgments together, the best they can hope for is the solution of the smartest person in the group.
Look at a traffic jam to recognize that getting rid of central authority is not the answer. Easy for decentralization to become disorganization (P76)
What is missing is any real way of aggregating not just information but also judgments
Internal markets as the solution…
Mobilizing Minds Bryan, Lowell and Joyce, Claudia 2007
Companies are being constrained unnecessarily by the unproductive complexity of working in their organizations. Investing in capabilities to relax these constraints is key to creating wealth. Enable to harness scale and scope effects
Rather than attempting major organizational design changes, many leaders make limited interventions and tweaks
When different managers with different responsibly make separate uncoordinated organizing decisions they wind up making it more difficult for people in their respective organizational units to work together. When you multiply this tendency across an entire company, tis not wonder that unproductive complexity is the results.
What you want is to increase the number of productive interactions among workers while reducing the number of unproductive ones
Only two rely ways that we can organize work - hierarchy, which organizes through authority, and collaboration, which organizes through mutual self-interests
Hierarchy – top down and bottom up, lowers interaction costs, simple,
Collaboration – free to interface with everyone else and choose their associations based on the nature of the work that needs to be done. Better use of specialized skills and knowledge, however requires a greater volume of transactions and more complex/expensive interactions.
The art of OD is the right mix of hierarch and collaboration as well as the right mix of individual and mutual accountability to best achieve the work that needs to be done (decisions that need to be made?)
May want to revisit p 54
The problem with the large numbers of people in org – difficulties in maintaining sufficient social cohesion and trust among people who don’t know each other to get them to willing share information and knowledge
Individual businesses must collaborate across boundaries, however give the widely differing approaches to organizing roles an evaluating the people who fill them in different organizational units it is not surprising that these difference drive communion challenges and conflicting behaviors. At best these differences require extensive interactions to coordinate work across organizational boundaries. At worst, organizational boundaries have hardened into silo walls, leaving people to behave selfishly.
Trying to overcome these issues through the use of matrix structures gains some benefits in terms of collaboration, but at great costs in terms of efficiency and effectiveness
Matrix just a complicated form of hierarchy – managers can’t get people to collaborate so have structured forced collaboration which has made structure more complex to navigate.
Designing effective organizations: how to create structured networks
Need to convey intended behavior patterns in eh key relationships in the design
Activities that most need to be coordinated fall within the structured boundaries –easier to do within that between
Why? Have view of overall responsibilities and goals, can see how all the activities within the unit can work together to achieve the goals. Also have authority to insist on coordination (and currency to influence)
Specialization – managers will develop skills and resources around their responsibly they are allocated. P51- 52, good description of the basic tradeoffs between market, product, etc.
Many companies corporate context inhibits coordination, misaligned incentives, rivalry between divisional bosses, a culture of secrecy or mutual mistrust undermine sensible working relationships. I.e. Reward system based on unit specific profability. Synergy killers –
Further problem is lack of clarity about the types of relationships that different units are supposed to have with each other. Need to clearly specify intended relationships between units
Additional problems from different perceptions of the costs and benefits, priority given to won unit goals reduces that to other units
P67, 73 dr, p 268 may have some ideas as well, concept of difficult links is good, also what to define
elos is a term used by philosopher Aristotle to refer to the full potential or inherent purpose or objective of a person or thing, similar to the notion of an 'end goal' or 'raison d'être'.
Cambridge definition of organization
The way in which something is arranged
Integrative thinking from r martin in opposable minds
The ability to face constructuction the tension of opposing ideas and, instead of choosing one at the expense of the other, geterna a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each
Big idea - build the best hierarchy you can, not just by defining the right elements of organization, but by defining this in light of human nature at both the individual and group level with a true understanding of the impact of the design choices on the behaviors that will ensue at both the individual and group levels
Socialized mind, where we can take responsibility and will be part of a team, will participate in tribes that have conflict, to self authoring that we reach in mid life where we have systems, and laws to resolve conflict and create our own identity and ideology independently, to a fifth order of reality where we can recognize the intractable conflicts we have as a species, a function of ideologies each of which have merit in them selves, an idea that is sometimes called integrative complexity. Self transforming mind where can hold multiple frames that are contradicting and problem solving is interdependent
Parallel organization from small start ups that bring groups together to team to more mature companies that have created their own culture and brand, to an self transforming organization that is designed to both house multiple frames that are in some ways contradicting but also to solve these as opposed to either living with the tribal conflict or employing rules and compliance mechanisms to resolve the inherent conflicts.
TO do this we need to first understand the mechanics of organizing - what are the things in an organization that can be arranged as a system. Second, we must understand what the impact of these arrangements is on our individual and group behaviors. Finally, knowing these two things, we can make choices about the arrangements we make in order to get the behaviors that will meet our purpose or Telos.
Functional and hierarchical barriers lead to operative islands (Hörrmann and Tiby, 1991)
his diagram of the organizational chart of various companies is from Nick Wingfield’s NYT tech column today, Microsoft Overhauls, the Apple Way.
I find it both hilarious AND insightful:
Belief CEO has that is infused - paradigm says that human beings are enormously capable and we need to create organizations that unleash that capability. The organization is the resource - the platform that human beings use to better their lives and the lives of others (so people are not the resource)
Problem with Haier - does not secure safety, basic needs, psychological safety not met in model per se.
40% of businesses succeed within the platform vs 10% in CHina, but still means 60% fail and don't have basic needs met...which is counter to the current approach to companies taking a role in social justice and providing living wages.
I/O PhD’s are the new gods of HR
Design of everyday things was actually the psychology of everyday things. We have always placed the human experience at the center of design. Behavioral economics just psychology applied to economic theory, demonstrating that we are not rational actors and therefore markets do not act in the ways traditional economics theories once posited but never proved out.
If social behavior is the twenty first century transformation not AI or big data like Haidt suggests, then the field of applied psychology to the workplace, known as I/O, really may be the new gods of HR!
Design of form st DMV - cognitive illusion, decision illusion.
When it is complex, difficult, don't know the answer. That is when you default to whatever is in front of you. The moment you set the default it has huge power on the decision you make. We don't know our preferences that well so we are susceptible to all of these influences from external forces.
Working hard on ppt - merger cancelled, very depressed because fruits of labor would never be seen. Meaningful condition - Sisyphus - essence of futile work. Doing something over for no reason particularly demotivating. No opportunity for big meaning, but even in small meaning it made a difference. People understand meaning but don't understand the magnitude of importance.
Adam smith vs carl marx - pin factory, production increased by separating tasks. Alienation of labor is important, if you make all 12 steps you care about the pin. We have switched to a knowledge economy, now efficiency is not more important than meaning. Are they thinking about it on the way to work. Labor = payment PLUS meaning creation challenge ownership identity
Why are you doing the work you are doing? Berry Schwartz, why is it that capitalism developed it created a mode of production in which all the non material satisfactions were elminited.
Answer is technology of ideas. Ways of understanding, social sciences, ways of understanding ourselves and has an enormous impact on how we think and act. Because of false ideas, the factory system was developed by Adam Smith and he was convinced that human beings were lazy and the only way to get them to work was to incentivize. We need to worry about the theories about human nature because human beings will be changed by the theories we have about them. Human nature is the product of the society in which people live, we design it by designing the institutions in which people to live and work. What kind of human nature do you want to help design?
Working titles/chapter titles
Formalizing the informal - how to unlock the lateral dynamics of organizational life
The summersault strategy
The Future Organization: Build your best Hierarchy
“And thats when the hornet stung me, and I had a feverish dream” tragically hip.
“You are ahead by a century” tragically hip