Big shift in thinking about organizations..
Whatever your ‘organization-in-the-mind’, there is a big shift in thinking about organizations. The divide between thinkers and do-ers will fade out. There is trend in moving from hierarchal top-down via customer oriented /socially engaged organizations into adaptive organizations. This trend has some history and is based on both the connotation of ‘bureaucracy’ and the rise of the intelligent workforce. There are new organizational principles coming up. These principles have already been proven over the last decade. This blog is about both the trend and the rise of adaptive/progressive organizations. Leaders who still believe in command and control, stability and change, will loose their organizational capability to survive.
The leaders who understand the merits of both smart operating systems so-called ‘variable systems’ and a vital workforce in what is called ‘social systems’ will be able to guide their organization into adaptive organizations. The concept of change will not be in their vocabulary anymore, they are adaptive.
Originally published on LinkedIn in Dutch, October 15th, 2018
Many thanks to Ruth Harvey for her editorial work for publication in English
Organizations—big or small—are creating value. A place where you earn your money and where—mostly—collaborate with others.
Question: What is your ‘organization-in -the-mind’? How does your ideal organization work? How does it feel to work there? Do you think in terms like ‘a machine’, hierarchical powers or a place where you collaborate and deliver a relevant contribution?
Whatever your thoughts, there is a tendency towards the development of so-called adaptive organizations. Before I do a deep dive, let me provide a short elaboration on developments in last decennia.
In his classic work: ‘Images of Organizations’. Gareth Morgan (1997) introduced ‘organizations’ as the following metaphors: 1. a machine, 2. an organism, 3. the brain, 4. a culture, 5. a political system, 6. a psychic prison, 7. a flux of transition and 8. as an instrument of domination. Recently in an interview with Oswick (2015) Morgan added two other metaphors an organization as 9. An ‘world wide brain’ and 10. as ‘a flux of media messages’.
This raises the following question: which metaphor is most applicable for you—which metaphor do you identify with most?
When I ask this to MBA-students the next 5 metaphors are dominant:—as a machine, as a brain, as an organism, as a culture and as political system. Here I reply to the students with the hypothesis that the last 2 as a culture and as a political system are used to stay away from the metaphor of a psychological prison.
And still the question remains with these MBA-students: “what is the definition of an organization and what is the best shape / best way for organizing—to run an operation smoothly”. Then I ask them about the intention behind these questions. Actually they want to know what to do to organize a unit as smart and smoothly as possible.
In my perspective there are 3 assumptions for any organization
1. Its intent is to deliver value.
2. It has an ‘operating model’ which delivers that value.
3. And it has a ‘business model’; even in governmental context
The real question is, what is needed to run an organization smoothly?
Which configuration does work best? I’d rather speak of configuration than about structures Mintzberg (1980) or ‘regimes’ by Kuipers (2010). The reason is that there are three assumptions in the work of Mintzberg, which are not useful nowadays. These reasons are: 1. The split between ‘thinkers’ and ‘do-ers’; 2. Organizations are open systems—structural thinking suggests otherwise, 3. Structural thinking does not say anything about coordination and equalization between its members. Mintzberg does however concede that coordination next to structure is relevant for it’s performance.
Kuiper states there are 4 regimes, which need to be considered for organizational design. These regimes are pioneering, bureaucratic, flexible and the hyper flexible network. Although the work of Kuiper is based on sociotechnical approaches there is no distinction between variable systems (operating model as non-self-referential allopoietic system) and real systems (self-reproducing autopoietic social systems) Achterbergh (2010). I’ve elaborated on the difference of variable and real systems in another publication.
Here I introduce 3 archetype configurations, as these, to some extent, are visible in any organizations. These 3 configurations are:
1. Classical top-down—artificial split between thinkers and do-ers
2. The reversed pyramid—customer focused
3. Adaptive organizations—purpose driven
These 3 configurations are visualized in figure bellow
Figure 1. Configurations of organizations.
These archetype configurations differ in their basis principles.
1. The classical configurations is based on stability and control. Their focus is from the inside-out, where a product/services is pushed to the market. The domination of R&D is still visible. Change is from one stable situation into another.
2. The social engaged configuration is based on customer intimacy. Stories from both the company and customers are shared. The social media is the marketing mechanism. It does not tell anything about the business rules internally. Change becomes blurry because the customer needs are both heard and influenced at the same time.
3. The basic principle of an adaptive organization is based on a compelling purpose and running an adaptable operating model. The business is run by ‘product management’ who uses information from trends and customer insights guided by the main purpose. The innovation process is run smartly in co-creation with customers and business.
These configurations are elaborated on in the next paragraphs
1. The classic configuration—top down
A classical perspective on an organization is that of an entity, which is pursuing a goal/objective, based on a vision, mission and a strategy to reach that objective. It is almost as if I’m describing the organizational purpose. And you don’t have a clue how this is established. To get the work done is another discipline. It has to do with processes and the way of coordination and equalization—the art of management & organization.
The big idea is that ‘the-work-to-be-done’ (its actual operating model) is divided into different task orientations, 1. functional, 2. geographical, 3. product, 4. process or 5. client/customer oriented. Practically you find combinations of different task orientation when a company is either larger (internationally) or it has different businesses.
The classical split in hierarchical levels is just a representation of the scope, accountability, responsibility and boundaries of either teams, departments or divisions. The word bureaucracy comes to mind. A conceptual framework, which could be seen as a synonym for decision/ responsibility and thinking in terms of control and stability. The classical organizational chart in layers and responsibilities is a symbol for the frame-works of scientific management. There are enough sources to validate these phenomenon: Clegg (1996, 2016), Epping & Keuning (2012), McAuley (2007) and Hardy (2013)
At the same time, when I see another organizational chart I think: “what are the merits?” “what do clients experience?”, “how are clients approached?”, “what is the actual and perceived value?”, “what is the real ‘work-to-be-done’?”, “what is the actual organizational dynamic?”, “how do the people talk about their work at home, with their peers in an MBA related master education.?”; And finally “how is the intellect of these increasing higher educated professionals in these organizations empowered?”.
2. The inversedpyramid
In the early eighties the CEO of the almost bankrupted Swedish airliner SAS Jan Carlzon introduces the idea of ‘moments of truth’:
‘Anytime a customer comes into contact with any kind of business, however remote, it is an opportunity to form an impression’.
Here the phenomenon ‘customer service’ was introduced in the field of strategy and management.
This is the initial way of working we nowadays label with ‘design thinking’ en ‘service design’. Actually the art to discover human behavior is field research followed by creating ‘touch points’ in what is called the ‘customer life cycle’. When I introduce the concepts of ‘touch points’ and ‘customer life cycle’ for the ‘average’ MBA student, than I’m asked to elaborate on these topics.
Nowadays we have all kinds of labels in this field: customer engagement strategies and for example a role called ‘customer success manager’.
These insights about the reversed pyramid are not described firmly in scientific publications about management & organization and organization theory. Except for the popular management publications of the 80’s by Carlzon en Peters (1989). The classic publication of Treacy and Wiersma (1995) about strategy and ‘customer intimacy’ does provide some guidance. The dominant reasoning is about strategy and not about ‘management & organization’.
The scientific explanation arises only with the introduction of the concept/research of ambidexterity, for example by Birkinshaw (2004). Businesses, which both explore the market and trends and can exploit their operation efficiently, enjoy a better performance—which supports their long-term survival. These companies do a better job than companies who mainly focus on their exploitation of current business and lack the ability to explore developments in the world around them.
The rise of both service and design thinking is a signal of the fall of ‘we technologist know what is good for clients’. The transition from the inside-out to focus on customers—the ouside—in’ is also seen in the way the customer information is used for the benefit of the organization.
The revolution in management & organization
Denial that there is a revolution in management & organization is possible, however today the signals are obvious: there is a revolution in the discourse and means of operational and strategic management. Hierarchal management and leadership as an outcome of management from the industrial era, does not fit current times. What are these signals? Two big trends can be easily identified:
1. Focus on innovation; 2. The adoption of new management philosophies / operating systems.
To Innovate—externally driven
The focus on innovation cannot be denied, proven by the amount of publications and adoption of methods, like Business Model Generation (Osterwalder, 2010), Design Thinking (Brown, 2010) en ’The Corporate Start-up’ (Viki, 2016). There is also a tremendous rush in the application of technological developments such as Artificial Intelligence. ‘Chat-bots’, development of the ’Self Driving Car’ and the rise of robots in the production industry, de agriculture and food, healthcare and at the home are just some examples
New management philosophies—beyond the ‘adoption-chasm’
The second phenomenon is that the experimental phase with new organizational mechanisms like, self-management and holacracy has passed. The so-called adoption chasm by innovators towards the early adopters is bridged already. Learnings from these experiments are already shared on a larger scale at conferences, seminars and meet-ups. Researchers, management consultants and practitioners are creating a larger community for the development of these management practices. There are already enough sources in publications in both academic Magpilli (2018) as in management practices like McCord (2017), Kolind (2014) and Den Ouden (2018).
At the same time, the themes from the innovation discourse are projected at the workforce. For example ‘customer engagement’ is an introjection into a management practice called ‘employee engagement’. This is direct result from a shift in the labour market where young professionals want to be seen and heard. This is caused by their higher level of education; they don’t take: ‘just adapt to our way of working’!’ and find this unnecessarily bureaucratic..
Themes and challenges around the ‘Future Workplace’, ‘The War on Talent’ are more than a trending topic on social media. The fast adoption—of these new management philosophies—are an attempt to answer these real management challenges. And these developments direct the way towards adaptive organizations.
3. The adaptive organization
This will be the last transition—as I’ve described in a former post—towards an adaptive organization. The concept already suggested by Toffler in 1995 has been realised during the last 20 years, in part aided by the technological developments and the rise of a highly educated workforce. What is it and how does it work exactly? An adaptive organization is based on three elements:
1. Based on a compelling purpose, all—digital—information sources and intelligence of people are used for the ‘work-to-be-done’ and continuous adjustment of the primary process of value creation. This is continuously supported with 2 dominant processes around the primary process.
2. A process of continuous development of creating new value by experimenting and testing with both clients/customers and suppliers
3. Continuously work and feed the fitness of the own organization This sounds a little abstract however the essence is that a few basic rules are followed which ensure the professionals are fit-for-purpose, collaboration runs smoothly and everything is done to keep the organization as fit as can be.
According Corporate Rebels—with some nuance from my side—adaptive / progressive—organizations are shaped by:
- a compelling purpose;
- values—these are crystal clear;
- freedom and trust to professionals with maximum supportive leadership to professional development;
- transparency—in every aspect: from business metrics till individual performance;
- customer/client information is essential;
- business models follow customer expectation and needs;
- organization adapts in interdependence to its environment, clients, technologies, practices, suppliers and stakeholders—better known as emergent strategies;
- a supportive set of operating rules to maximize production/professional productivity—related to ‘the-work-to-be-done’ working in a network of team-of-team;
- ‘change’ does not fit the vocabulary of people in adaptive organizations;
The assumption behind any adaptive organization is that each professional acts as an intelligent sensor and from his/her role adds value to the purpose of the team and the companies purpose. The classical divide of thinking and doing fades out in the background.
There are enough examples of adaptive organizations. Corporate Rebels have visited a whole list of companies and shared their lessons with anyone who is interested. Additional examples are Impact Hub—a network of social entrepreneurs with a lot of locations all around the world. Another example is Basecamp founded by Jason Fried.
The ones who made and will make organizations work are people. In future the classical divide of thinkers and do-ers will fade out. In future, adaptive and progressive organizations people are the ones who make these organizations work.
This blog post—published earlier in the Netherlands on LinkedIn—raised some comments regarding configurations, from ‘structuralist’ organizational designers and agile coaches.
Historical and actual insights
These comments were mainly about ‘good structural design’ of the operating model and the individual and teams freedom of job control. The approach called social-technology, which was originally researched by the Tavistock institute in the Durham case Trist et.al (1951, 1965). The social-technique—meaning the structural design and job control in the operating model—was further developed by van Amelsvoort and de Sitter. In the social-technique people in the operating model are a ‘component’ in the structural design of the operating model—as a component in a clock-work (Boulding 1956). Clegg (2012) argued an employee is a meaning processing person. A person / an employee with only individual job control is a simplification of complex reality of collaboration and the social network at the workplace.
Achterbergh (2010) was the first who coined that an organization is a ‘social systems’ conducting experiments to their survival. Achterbergh also suggested that there is a divide in a ‘variable’ system—the original operating model as an allopoietic system—and a ‘real’ system of interaction between members as an autopoietic system.
At that time of the research of the Durham case and the development of the socio-technique, the merits of autopoietic social and psychic systems—suggested by Luhmann (1984, 1996), Achterbergh (2010) and Snippe (2012, 2014) was not available, nor adopted in management education.
Now we understand more about the merits of an organization as a social system we can be more convenient to judge on the validity of Morgan’s (1997) suggestion in the metaphor ‘a flux of transition’. Morgan was the first who adopted the mechanism of an ‘autopoietic system’ (pg 273).
Combination of configurations
There was another discussion on this blog-post as to if each organization has or needs these three configurations at the same time. Actually I’m aware of the fact that the classical top-down still exists—I’ve seen them just recently in industrial technical companies. There was micro-management and lack of customer intimacy to drive performance and business innovation. I’ve seen the other perspective of purely purpose driven adaptive organizations in high-tech IT companies where holacracy was adopted and all professionals were real sensors for the benefit of customers and the development of the business.
In current operating models where IT plays a huge role in customer interaction / customer transaction and administration, the agility of IT-departments—based on both scrum and an Scaled Agile Framework (SAFe) is already mature. This agility is not always adopted in the other parts of the organization. There some combination of different configurations can be found.
Rules, What rules, F#&% the rules: You need rules anyway!
Everywhere there are rules. The rules in a bureaucratic context have there value. These were based on the classic divide between thinkers and do-ers. with the upcoming intelligent workforce some rules need to be redefined.
In adaptive organizations there is need for other principles/rules because of the intelligent workforce. Principles and rules for professional engagement and collaboration. And many rules exist also in adaptive organizations, good examples are the ‘rules’ in using holacracy, the rules of ‘Action Learning’, the rules for Rapid Design Co-creation. These rules just support collaboration regardless the outcome and meaning for individuals.
So don’t mess up the concepts of ‘rules’ and ‘bureaucracy’ and ‘hierarchical power’. Even in adaptive organizations there are rules of engagement.
What if leadership would know…
In my opinion companies will become more adaptive, it depends on both leadership and focus to conduct experiments for the benefit organizational survival. It depends on be leader’s ‘organization-in-the-mind’. Leaders who do understand both variable and real systems are able to guide organizations and support the intelligent workforce.
Understanding the merits of these real social systems will help leaders to enhance their capacity to rely on the intelligent workforce. Sometimes I see organizational patterns which are dysfunctional for both business and sometimes even harmful to unleash the full potential of the work force.
With some years of experience in the field of operations, design and innovation, I’ve concluded the game to innovate is just a survival mechanism for organizations. It’s the organizations purpose to run the game of innovation rigorously. Understanding both the need for and how to conduct experiments will help organizations to become adaptive and support their capability to survive.
What if leaders would know about the fundamental insights of human nature in social systems. What if designers would know… What if recruiters would know…
Continuous learning is the only way out!
Reframe your ‘Organization-in-the-mind’.
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