Creating adaptive organisational designs

Organisational structure is a fascinating topic that has been the focus of much academic and practical research over the past century. The first metaphor I was taught as a representation of how a firm is organised was the “pyramid” where the workers at the base undertook operational activities that were coordinated by the next layer of management, who were guided by business strategy developed at “pointy end” of the pyramid of executive/senior management.

There were a lot of assumptions in this design:

1. The knowledge and expertise was at the top of the pyramid
2. The information flow was upward – management needed information to control operations and executives needed information to control the business.
3. The more knowledge an employee had, the more likely they would be able to move upwards.
4. Knowledge was trapped by systems (e.g. production lines, machines, etc.) and operational workers were employed as a component that undertook defined tasks within these systems. These tasks were “isolated” from each other and therefore workers became masterful at one part of the process, with little conversion between tasks.

The next step in organisational design was based on the advent of information and communication technologies that were seen to be able to “replace” line workers and provide better quality control through “business process re-engineering.” Furthermore, less workers meant less managers and considerable downsizing and flattening occurred to create sparse organisational designs where remaining managers had larger jurisdictions of control and authority and remaining workers were closer to strategy and executive. The results of this approach were mixed. While automation provided release to workers from mundane and dull tasks, much of the innovation potential and know-how of the firm was retired early, redeployed, resigned, or retrenched. While the bureaucracy of middle management had been slashed and operations were closer to strategy, most of the managers who had traditionally operationalised strategy were mid-career unemployed, struggling to find work, or taking up home maintenance franchise opportunities!

The flat organisation is still a major design artefact in many businesses today. However, more and more organisations are starting to obtain value through a network view of the organisation. The network view builds on the benefits of the flat organisation through providing “information and knowledge marketspaces” for stakeholders (customers, employees, suppliers, regulators, shareholders, etc.).  The networked organisation focuses on connectivity over control, enablement over isolation, and accountability over authority. The networked organisation creates a complex sense-making network where new ideas, information, and knowledge can be readily obtained because knowledge and information is dispersed across the organisation and beyond. The organisational boundary becomes very difficult to plot in these business environments and often “customer value” is obtained through the combined capabilities and outputs of multiple business partners or service providers. Furthermore, knowledge from these new alliances filters back to the organisation through interactions and “cross-fertilisation” of ideas between companies with shared interests, but different capabilities.

All characteristics of the networked organisational design point to a far more adaptive environment where people are central to processes because collaborative relationships are central to the business objective of sustained competitive advantage in existing markets and first-mover advantage in emergent markets.

Of course, there are many trade-offs with networked organisational designs and you should consider your business environment carefully before moving towards implementing these structures. Some of these trade-offs are:

1. Greater transparency – while this may sound good, careful preparation and management needs to be undertaken to ensure stakeholder support.

2. Spill-overs – opening up the boundaries means that security policies need to be invoked to ensure information and knowledge that is proprietary or secret is retained safely.

3. Head-hunting – employees often interact more with people outside of their organisation than inside at times and “going native” is more likely.

4. Reduced management control – information asymmetries are eased and therefore workers are more knowledgeable and more capable of finding “work-arounds” in the system. Enhanced ability to communicate gives workers a greater voice in the company and its operations. While the democratisation of the workplace can be a positive aspect of networked design, there are obvious negative repercussions if these liberties are abused.

In the end, I believe that diversity leads to adaptation, therefore,  the best organisational designs represent a fluid mix of pyramid, flat, and networked structures, which are knowingly invoked to satisfy particular strategic requirements.

Learning the lessons and building community – debriefing after crisis

In previous posts I have described my beliefs regarding the management of crisis and the rewards associated with good crisis management. The final point I would like to raise about crisis management is the importance of “debriefing” after a crisis has receded.

You may recall that I had just been part of a specialist team that had formed through a well-negotiated process of requirements. However, when the team met for the first time, the original agenda and business expectations had completely changed and our fledgling team had to adapt very quickly to provide the new outcomes in the time it had. 

The professionalism displayed in calmly setting about the task set was a credit to all concerned. However, there was a significantly different end to the team’s time together than what you would normally expect. This difference came from a spontaneous “debriefing” that occurred as soon as the main deliverables were achieved for the four day session. 

This debriefing session was started when one of the participants passed comment about how well the team had measured up to the task. One interesting observation was the credit given to a team member for “taking the heat” of the main team by removing outside communication to create a “bubble” where the team would be able to “do what they were there to do.” This team member left the room with the promise they would field any calls made to the group and they would not allow the group to be interrupted again. Removing the “stimulus” of all the anxiety gave the team time to focus and really think deeply about the new problem space, which led to the revised solution. 

Other team members then started to give positive support and praise to each other about how they had all managed the situation and how they were humbled by each other’s capabilities to act under pressure. While this process may sound a little “over the top,” it provided a mechanism for the group members to release the pressure. The debriefing process also gave the group members the time to think about the success of the session and the success of the group itself. 

I suppose when we all came together, we knew that we had been hand-picked for a reason (i.e., we were good at what we did), but we did not know how well we could convert our knowledge into action as a team. The adversity of the crisis and the ability of all team members to open up and give each other genuine praise was the moment when we turn into a real team. 

You might be thinking – yeah, I can see how debriefing works when the team works together well, but what happens when it doesn’t? In this situation, debriefing should follow the principles laid out in the “crisis management list” I gave a few posts ago. For trust to grow, people have to be honest in acknowledging their weaknesses. On the other hand, team members also need to be understanding of each other’s circumstances and realise that whatever happened, each person was doing the best with what they had at time. 

When we realise this last point, it becomes much harder to criticise the other person because we all have our weaknesses, we all contributed in some way to the problem occurring, and we all contributed to its solution. These sentiments build a stronger team and closer heart-felt relationships between members. Also, humbly revealing our strengths and weaknesses makes us stronger and more able to cope with crisis next time it inevitably comes knocking.

A personal account of a business crisis and its aftermath

They say that what you think about often happens to you. Well, after writing the blogs last week, I found myself in a similar crisis situation, where plans that were a long time in development and negotiation were completely uprooted by a new set of fast emerging business imperatives and requirements.

While things have settled a little, the ramifications of the crisis are yet to be understood fully, so it would be unwise for me to give much more detail about the crisis itself. However, I can give you the details of the team that faced the crisis:

• A hand-picked group of 9 people brought in from Europe, SE Asia, and Australia
• Experience and professional backgrounds were all different
• One of the leaders was not present and participated via video conference like a “talking-head in a laptop” (at lunch we would take the laptop into the kitchenette at the office and he would have a break with us – a little surreal really!)
• We didn’t know each other prior to the engagement.

After I had left the scene, I went back to my list of suggestions for crisis management from the last two blogs. It was amazing to read these suggestions and relate them to the behaviours of the people who were present at this team meeting. The following is a personal analysis of the outcome of the crisis:

When the crisis hit us, there was so much that could have gone wrong outside of the actual crisis itself. The differences in culture and religion in the room were diverse, the potential for disagreement and fragmentation was high, misunderstanding based on different language and meanings to words could have created enormous friction and destroyed group cohesion, etc.

You can see how the list of possible problems could have been endless, but the amazing thing was – every member of the team lived up to the actions and behaviours I listed in the previous blog by experience and nature.

I can now report what the aftermath is when these suggestions are enacted by each individual across the group: Intense social cohesion, bonding, and trust

Adversity and crisis has a silver lining when people act with vision and responsibility for each other – even in environments where initial social connections are not strong.

My feelings and respect for the people whom I suffered with during that crisis are strong and I would trust and work with them at another occasion. In fact, I would go out of my way to work with them because rather than being a team of stars, we proved we could be a star team. I feel fortunate to have met them and worked with them and I look forward to a long association with them. These sentiments were shared by the whole group and there is a stronger sense of purpose than if everything went right.

So my key observation about crisis is that when it is well managed, good things happen for those involved, regardless of the outcome. The important point here is that each participant in the crisis I describe all shared a common belief system and a common approach – even though we had never really met and we were separated by culture, professional background, and distance. If we can get positive outcomes out of these complex and potentially adverse circumstances, there is no reason why work teams within organisations can not do the same.

In the end, success or failure is a state of mind, while I do not know what the outcome of my crisis experience is, I can definitely say that I have gained much more through the experience than if things had gone to plan

Even if the project we were engaged to deliver looks like collapsing, I have a feeling we will find a way to get it back on track – because we believe in each other, and we believe the project can still be viable. Through adversity, our goals have become clearer and our intention and commitment stronger.

Leading and managing in crisis – Part 2

I started to list essential conditions for success in disruptive situations. I will continue to elaborate on these conditions in this post:

Further essential conditions that are required to maximise the opportunity for success in wicked and disruptive situations are:

6. Harmonise rather than disenfranchise outsiders

Develop a clear understanding of the larger social implications of the larger organisation. Seek counsel with stakeholders. Give “one view” of the situation to the outside world.

7. Simplify the problem – go back to basics  

Seek the “higher ground” of abstraction. Don’t get caught in the detail. 

8. Be honest, but know the difference between science fact and fiction 

Remember that you are dealing in a situation where you don’t know the outcome. Therefore, be honest, be positive, and show integrity in your intentions. Tell your team the target is to survive and thrive. However, don’t be overly optimistic or pessimistic because these sentiments are based on old rather than new knowledge. 

9. Be authentic, reinforce all you do with clear values 

Match your rhetoric with real action. Make sure your decisions reflect shared values. Accept that you are not perfect and know that some decisions you make are going to lead suffering. When you bring sorrow, be gentle. 

10. Use a soft but firm hand 

Leadership is borne from compassion. At the same time, leadership requires direct communication, which reinforces the need for your team to know when it is time to challenge and when it is time to act with faith of your ability to coordinate the campaign. 

11. Know when you have enough data – don’t wait for perfection 
 
Fear of making a decision leads to a “need for data.” Often the data we seek is impossible to obtain because it lies in the consequences of our decision. 

12. Be courageous, but don’t be fool-hardy 
 
The situation requires new approaches, decisions, actions. All of these components of the problem are fraught with risk. However, you have to make your best decision based on what is in front of you, not by betting on “the odds.” 

13. Don’t waiver – show clear intention and direction 

When you make a decision, put yourself into it, commit. Be open and flexible to change, but maintain the intent of your purpose. Inconsistency leads to fragmentation and confusion. 

14. Let go and open yourself to the field of possibilities

The only way out of disruptive change is to keep an options-based view of the scenario as it arises. As the situation evolves, new options come to light and old options are extinguished. Match these options with your intent and the path may become clearer. The common thread that runs through each of these conditions is: 

How we manage and lead others is based on how we can lead and manage ourselves. 

Self-knowledge and meta-cognition (thinking about our thinking) are essential to good leadership, whether it be in crisis or through daily interaction. The greatest leaders are those who command a deep understanding of themselves and what they must do. These leaders imbue self-discipline and self-control, which is a model of behaviour for their followers. 

I believe we all have these abilities within us, if only we would believe enough in ourselves to release them for the good of the situation. 

Therefore, leadership and management in crisis is about each team member’s ability to lead and manage themselves with integrity and shared intent. 

When these forces coalesce, the likelihood of survival is increased radically through an emergent and overriding sense of group purpose.

In truth, there is always a solution as long as we have the tenacity and wisdom to seek it out. 

Leading and Managing in Crisis

Each day need to learn and apply new knowledge to ever-evolving contexts. Most of the time, this process is incremental, . we build upon our existing assumptions and apply the same thinking to solve problems that arise through business activity. We don’t really notice the moment-by-moment accretion of new experience and understanding; this change is within our comfort zone.

At times this steady rate of change is shattered by disruptive circumstances that create radical disequilibrium.

States of disequilibrium in a system are unsustainable in nature. Therefore something’s gotta give!

These moments occur when our current knowledge and understanding is unable to solve the emergent wicked problems associated with the new environment and we are forced to go outside of what is known to seek a solution.

These moments bring great discomfort to those involved.

These moments are when the greatest human triumphs or failures occur. We either rise to the occasion or we are sent to oblivion.

What strategy can we use to weigh the odds of success in our failure when we are faced with these disruptive circumstances? While every situation is different, I believe there are essential conditions we must create to maximise the likelihood of success:

1. Don’t panic!

Use self-knowledge and control to repress our instinctive urge to either fight or flee from the situation.

2. Slow down, be still, and refocus! Timing is imperative to success.

We often feel we have to respond right away at all levels of a problem. Taking control of our reflex to act without direction can often save us. I have also found that spending a moment to completely clear my mind leads to a more comfortable and less stressed state where I feel more empowered to do what is right.

3. Don’t blame or start finding excuses

Every moment you are shirking responsibility and finding reasons for failure puts you one more step towards your subconscious intent – failure. You must attend to the issue.

4. Keep the team focussed and motivated

Your one greatest asset is your team. You must ensure they stay together and keep focussed. All is lost when we start acting individually (all hands for themselves) rather than as a group.

5. Keep the core team together

Sometimes, the problem is so large that we need to re-engage it with more people, processes, and technology that are brought in from outside. When this situation occurs, ensure that the core-team remains intact, either by literally keeping them together or by giving each original member a leadership/coordination role in each of their areas of specialisation.

Uncertainty and the unexpected

A clear point made in previous posts has been that we should “expect the unexpected,” in the new order of things. While “expecting the unexpected” may sound like a cliché, there are a host of important leadership and knowledge management issues represented:

• How do we deal with events that we have no prior knowledge or experience of?

I think that most of us would say, “We’d ask someone we thought could provide the basis of a solution based on their experience.” Or, “I’d call my team together and work through the issues to find a solution.”

The implication:

Dealing with the unexpected requires participants to have good informal or formal social networks that can be enacted quickly.

• What if the “wicked” problem we are facing continues to increase in magnitude through events our of your direct control and others your networks fail? At the same time, others from outside of our network are brought in “to provide additional support” because the problem is becoming more dire to the firms’ (and your) continuity.

At this stage, responses would be more difficult to represent. People would have their own approach to the problem and how it should be solved. However, many people would comment that the “incursion” of outside assistance may not improve the situation.

The implication:

As pressure to perform increases, managerial actions that essentially throw resources at the problem is likely to lead to more confusion and sub-optimal outcomes.

• The next stage of the unexpected occurs when the group is frustrated in its attempts to resolve the issue and a sense of panic starts to take hold. Your leadership is threatened and traditional allies seem to be focusing on trivialities or self-preservation. 

The implication:

The group begins to disintegrate when it fails to attend to the unexpected. Disintegration drives fear. Fear drives a wide variety of self-survival behaviours that loop back to create further friction, lost opportunity, and desertion. 

The scenario I have described is extreme to make a point. However, we are often faced by similar “accidents and emergencies” during our careers. Unfortunately, the prognosis for the story is not a happy one because continuing on the current trajectory will lead to further shocks that will lead inevitably to total collapse. 

If only a miracle can redeem the situation, could the likelihood of it occurring have been reduced in the first place? My answer is YES and I will tell you why in my next post.

Complexitisation: The greatest threat to personal and organisational change

I have chosen to create this word, ‘Complexitisation’ to illustrate a fundamental set of human activities that create enormous barriers to change at both the individual and organisational levels.

Complexitisation is a rich concept! Here is an example to illustrate its impact:

A new graduate is recruited for a junior management accounting position in a manufacturing firm. From day one, the graduate is barraged with a torrent of new employer expectations, business rules and processes, cultures, human relationships, technologies, and defining situations that shape their understanding of their work environment and themselves.

To survive in this environment, the graduate must attend to many things. Unfortunately, attention is guided primarily by self-concerns about performance. In the end, they want to be part of the team and they want to be held in esteem by their workmates. They remember what brings self-assurance, comfort, strength, authority, and control to theirs and others lives and these experiences compound and aggregate as a representation of themselves – to themselves, and to others around them. The processes they have been through are what I call complexitisation, which is the continuous growth and clustering of experience and meaning around a set of activities, tempered by emotional and social circumstances.

Now, how does complexisation impact on the graduate’s (now senior employee’s) ability to change?

When the senior employee is faced with a challenging, new situation that requires change, they use a complex network of knowing to navigate through the situation. They now judge the situation from multiple perspectives and consider multiple alternatives. They “rationalise the situation, they pre-measure the likely impact and risk on their personal comfort, continued success and self-belief. In effect, the emotional scares of prior victories and failures bubble up. The senior manager, when faced with the overload of the situation goes back to the ingrained mental structures that have served them well in the past – HABIT.

Therefore, complexitisation leads to a looping downward spiral of behaviours. The more the senior employee is confronted with the new situation, the more likely they will provide the same simplistic and habitual response.

Ironically, the senior employee will tend to complexitise the reasoning for their habitual response with superfluous data and information dredged up from a range of different sources. Deep analysis and “information warfare” add unneeded complexity to the decision making process. At the same time, these processes are making the senior employee feel safer and more in-control of the change situation.

I chose the word complexitisation to illustrate this process – you were faced with a new word (probably with a deal of cynicism and discomfort!) As you read through my description, you took your own circumstances into account and tried to match them with my definition and example, and now (perhaps) you are faced with the option to either “discount” or “act.”

If you have decided to “act:”

The first step to reducing the influences of complexitisation is to recognise and re-evaluate our HABITS, which requires you to reflect on whether those habits are really worth holding onto as the truth. The second step is to ask those you work with for their observations on your behaviour. If you are a manager, open up the conversation (gently) with your team. Being a leader is acknowledging your own weaknesses and actively trying to address them in ways that model good personal change behaviours to your direct reports. You will be surprised how they will respond if this process is done with sensitivity and forthrightness.

Riding the bull or fighting the bear – competing in a world of change.

Change is fundamental to our being and therefore we should embrace it.

Change applies equally to the groups and teams we are a part of and the organisation, industry, nation, and global community in general. It is all a matter of scope.

There are four omnipotent laws that guide our lives in business and in general:

The Law of Impermanence:
This law is stated simply as “nothing lasts forever.” Life is flux and a necessary cycle of birth, growth, decay, and death is an inevitable consequence of life itself.

The Law of Uncertainty:
We never know what our fate will be and we can never predict anything with absolute certainty.

The Law of Centricity:
Life is balance – we experience joy as equally as we do suffering. Nature always seeks equilibrium or centeredness.

The Law of Active Participation:
Life learning and adaptation is not passive – we only maintain our currency and vigour through continued active participation in life by effort and activity, which leads to first-hand experience and ultimately wisdom.

I have tried to provide a balanced view of the forces that continually shape our life. While impermanence and uncertainty conjures “negative” sentiments (depending on your perspective of course), Centricity and Active Participation provides hope through external (centricity and natural equilibrium) and self-induced (active participation) transcendence.

These axioms combine to provide a number of significant insights that I would like to share with you:

1. If change is inevitable, we need to learn to deal with change as a fundamental and necessary part of our business environment and our careers.
2. The success of our enterprise is based on our ability to comprehend, predict, and adapt  to an ever-changing global business environment.
3. If our life and our career are transient and we don’t know how long either will last, we must make the most of each opportunity presented to us. Lost opportunity and wasted time detracts from our ability to reach our true personal and business potential.
4. If our managing and leading a modern enterprise is fraught with risk and uncertainty, then break-through innovation is based in accepting (and hoping for) the unexpected.
5. If our business and career strategy is not working, we need to go back to first principles and learn from our mistakes to avoid the systemic mistakes that keep placing us behind where our stakeholders believe we should be.

How does change impact on your business? How do you deal with it? And how do you overcome resistance?

In the next post, I will discuss why we often don’t like to embrace change and how we can improve on this situation – at both a personal and organisational level.