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.

What’s in a wiki? Why wiki?

The wiki is a simple concept - it is a website that contains an edit option on each page. A visitor to the website can click on the edit button, change the content on the page, or link to another page on the web or within the wiki.

The wiki is a core tool in the growing suite of applications described as ‘Enterprise 2.0’: a phrase coined by Professor Andrew McAfee of Harvard Business School in March of 2006. It describes the use of social media tools by organisations as part of their work practice.

Earlier this year blogger Toby Ward, posted this item that discusses some Enterprise 2.0 success stories. He does use the term ‘Intranet 2.0’ rather than Enterprise 2.0 but in this context they are interchangeable (Thanks to Melbourne KM’er Andrew Mitchell for the link).

CPA Australia recently re-launched CPA Good Practice Guide – in a wiki platform.  Here is the official description:

“The CPA Good Practice Guide is a collaborative initiative between CPA Australia and its members. The online guide provides members with a comprehensive collection of tools, procedures, templates and checklists that can be used in day-to-day business situations.”

The Good Practice Guide itself is a useful KM tool. But, you may now be wondering, why have you put it into a wiki?

The main reason is the flexibility it offers. CPA Australia has adopted an enterprise wiki. That is, a wiki which along with the standard wiki features such as simple editing, tagging and cross-referencing, also integrates with the CPA Australia website and provides us with detailed access control options.

As a result of this flexibility we are able to rapidly add new content and enhance existing content. We are also now able to encourage contribution from users. The CPA Good Practice Guide has always been created and driven by members, it seems a natural extension to encourage direct contribution.

Currently the CPA Good Practice Guide is private and in ‘Comment Only’ mode, meaning only CPA Australia members or GPG contributors can view the guide and provide feedback using the comment function.

At this stage the Good Practice Guide resources themselves cannot be edited. The access control settings allow us to start out with a locked down version of the guide and over time create new areas where contribution is encouraged. The beauty of this system is that formally reviewed content and member generated content can be separated and clearly identified within the same website.

The wiki is a simple tool that opens up many new possibilities, the example I have outlined above is just one possibility. We are experimenting with a range of smaller scale ‘behind the firewall’ projects within CPA Australia, I’ll write more about the challenges and benefits of some of these over the coming months.

Have you implemented a wiki project? Tell us your stories about how it went.

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Mick Leyden
Project Executive - Knowledge Exchange
CPA Australia

Service-Dominant (S-D) Logic is an important new mindset in business. The fundamental premise of S-D Logic is that organisations, markets, and society are fundamentally concerned with exchange of service where a service is the application of competencies (knowledge and skills) for the benefit of a party. Thus, service is exchanged for service and all firms, markets and societies are service-based.

The fundamental difference between the more traditional Goods-Dominant logic and S-D logic is that S-D logic embraces value-in-use and co-creation of value and rather than value-in exchange and embedded-value concepts of G-D logic.

S-D logic advocates that rather than firms marketing to customers, customers are co-creators of value and the nature of that value can only be judged by the customer. Firms therefore can only make value propositions and these are either supported (translated) or rejected by the customer. Furthermore, firms must leverage the co-creation of value with alliance partners within their value network.

Let’s turn our attention to Tony’s post – CPA Australia and the Smart Enterprise. With a little analysis, we can see the strong threads of S-D logic and its innovativeness in CPA Australia’s knowledge strategy:

Co-creation of value with members:
• “Leveraging the IP of our members for the benefit of our members” (Connecting & Exchange)
Co-creation of value with alliance partners:
• “Provide a wider range of technical and non-technical knowledge largely sourced from high-quality education providers under alliance/partnership arrangements” (Relevance & Reach)
Value propositions:
• “Provide knowledge through innovative media” (Anytime, Anywhere)
• “Provide a compelling and market responsive CPA Program & flexible entry pathways for global career advantage” (Market Responsive CPA Program)

The strong ties with S-D logic and the CPA Australia knowledge strategy shows foresight by CPA Australia in making it’s services at one with membership needs. The key to it’s success will be how you as members will embrace the strategy and assist CPA Australia and your fellow members through adding your own value through participation in the program.

I strongly recommend you spend some time reviewing: http://www.sdlogic.net if you are unfamiliar with S-D logic. I believe this “mindset” will be at the centre of future organisational success. Particularly in a world that is Web 2.0 enabled (see Mick’s post below) for customers to take part actively in co-creation.

A “Smart Enterprise” is one that allows knowledge, enabled by technology, to grow and flow freely, and on-demand, across departmental, geographic or hierarchical boundaries, where it is shared and made actionable for use and benefit by all.

CPA Australia has responded to member needs by developing a member-focused knowledge strategy. As a result of the internal, customer, competitor and external analysis completed, five key strategic themes have emerged that are essential to driving knowledge innovation and contributing to CPA Australia’s corporate goal.

Employability: CPA Australia will provide knowledge that supports our members through their career continuum.

Connecting & Exchange: We will leverage the IP of our members (for the benefit of our members) by helping them to share, contribute, exchange and access their combined intellectual capital.

Anytime, Anywhere: We will provide knowledge that is flexible and delivered in innovative channels & mediums that are responsive to market and member needs.

Relevance & Reach: We will provide access to a wider range of technical and non-technical knowledge largely sourced from high quality education providers under alliance/partnership arrangements.

Market Responsive CPA Program: Provide a compelling and market responsive CPA Program & flexible entry pathways for global career advantage.

Please remember this is all about people and not technology, more of this in my next post, but for now I would like to hear what our members think about our planned approach - Your Thoughts Please !

Every day I encounter something else that has gone ‘2.0’. We’ve got web 2.0, enterprise 2.0., library 2.0, recruitment 2.0, marketing 2.0, learning 2.0, journalism 2.0 and that’s just the handful I can think of off the top of my head. The question is, why should you care about yet another techno revolution?

The answer is not because your Gen Y staff will expect to be in a Workplace 2.0. It is because behind every ‘2.0’ initiative is a group of people with ideas, passion, motivation and enthusiasm.

Let’s look at another term often used to describe Web 2.0 tools; ‘Social Media’. I believe this term is a little more appropriate as it describes the heart of the 2.0 revolution. It’s is about people and behaviour far more than technology. This from Social Media and Enterprise 2.0 strategist Ross Dawson:

“successful Web 2.0 initiatives in organizations are fundamentally about shifting attitudes and behaviours. Collaboration increasingly drives value creation in organizations, but for that technology is only an enabler.”

The last few words here are the key point to keep in mind when thinking about everything 2.0, ‘technology is only an enabler’. Over the next couple of weeks I am going to look at a few of the key 2.0 tools and trends. I’ll tell you what they are, how they work and most importantly why they are worth your attention.

To kick things off check out this video which I think does a great job of describing what web 2.0 (or Social Media) is all about.

Earlier I wrote about an example of a manager unable to let go of control of their team’s tasks. While perhaps it was extreme this example provides us with clues about good practices in delegation:

1. Know the details of the task to a degree where you can make a good delegation decision.
2. Know the capabilities of your team members OR use the team to choose who has the best knowledge and skills for the task (you need to have set up a positive work culture first otherwise the task will become a “hot potato!”)
3. Know the performance requirements for success (based on your knowledge of the task) OR set these performance requirements with the team or team member.
4. Provide input or facilitate the team members’ execution of the task.
5. Assess the task outcome on the basis of the performance requirements.
6. Reflect on what went wrong and celebrate what went right in the task with the team member.
7. Enshrine these learnings with the team through discussion and perhaps case writing.
8. Pass these learnings onto other teams if they are generalisable and valuable across the wider organisational context.

The last three points of this list are essential for good knowledge management – these processes involve: self-reflection, group discussion, and generalisation to the broader organisational context through formal and informal social mechanisms.

In order to practice what I preach, I will be delegating aspects of this blog to my trusted and noble associate Mick Leyden, who is a Project Executive in CPA Australia’s Knowledge Exchange Team.

Mick will be discussing web 2.0 and other commonly available tools in the context of how they can support your business operations and strategy.

One aspect of successful leadership is knowing your team members and what they have to contribute. This point may sound self-evident, but you’d be amazed how often managers have no idea of what their team really can do – either in combination or separately.

Why is do managers fall into this trap? Perhaps managers in this situation are:

• Too busy and pay “lip service” to their team.
• Self-isolated in the sense they have created a social structure where there is a strong distinction between who “on-top” and who’s “below.”
• More interested in the “divide and conquer” principle of management – where the manager maintains high levels of competition within their team to ensure they maintain control of the team.
• Focussed on centring the workflow around themselves so they can keep control and feel like they are “managing.”

Often managers who partake in these activities use “ad hoc” delegation. Ad hoc delegation works like this:

1. The manager needs someone to “do a job” for them – perhaps this job is menial or the manager doesn’t like the task.
2. The manager chooses one of his team for the task on the basis of favours – who they like or dislike, depending on the role.
3. The team member undertakes the job. No performance expectation is given and often there is a lot of missing information the team member has to construct to understand what the job is (sometimes the manager has all of this information and makes in unavailable for reasons fuelled by their own agenda).
4. The job outcomes become known and the manager makes a subjective judgement on the team member’s performance.
5. Often this performance was not as good as the manager wished it to be or was not up to the managers’ expert standard.

The outcome of this scenario reinforces:

• The managers’ dominance in the team as the objectives setter, controller, and evaluator.
• The team members’ subservience to the manager.
• The managers’ belief of his capability over the less-experienced team.
• The team members’ belief the manager is not working with them and at worst, is actively working against them.
• The managers’ belief that he can’t delegate real responsibility to his team members because they “aren’t ready,” or at worst they are “incompetent.”
• The team members’ belief that working for this manager is a waste of time and there are better opportunities elsewhere.

While you may be thinking the example is extreme and perhaps a stereotype, reflect for a moment on whether you have subconsciously led your subordinates to similar outcomes. I know I have and I should know better!

In the past few posts, I have focused on extra-ordinary situations where an organisation is in crisis and how a manager can best deal with the crisis in holistic terms.

I have expressed these views in management forums and I often get a “hot-cold” response.

• Hot - managers can see the value of the approach given.
• Cold - managers question whether their team has the emotional and intellectual skills and resilience to act inter-dependently and behave accountably during the time of crisis.

My retort is always the same – If your team isn’t up to the mark, whose fault is that?

Of course, there is always stock defences such as “employees expect more and do less these days,” or “Gen Y don’t care,” or “the employee turnover in our organisation is chronic.” But my refrain stays consistent – Whose responsibility is to ensure the team works productively to obtain required outcomes?

I suppose I have led these managers into a trap – where they are pressured to realise that performance at any point of time isn’t about “managing the moment.” Rather, performance is grounded in consistent and continued preparation through coaching, grooming, and mentoring, which is equivalent to a Learning Environment.

Surviving crisis is not only about actions undertaken at the time of the crisis. Surviving crisis is about all actions and events that have shaped the organisation up to and including the crisis.

Furthermore, a crisis is just another “event” or “happening” in the life of an organisation. Thus, every new “event” in an organisation is based on the sum of all past “events” experienced by the organisation and its people.

To understand these profound insights is to understand the basis of knowledge-based leadership and management. Let’s distil the message I am trying to give into a simple analogy: “The Leadership Bank Account.”

The rules of the Leadership Bank Account are very simple:

• Every time a manager does something to build a positive and resilient culture, the Leadership Bank Account gets credited.
• Every time a manager does something that directly or indirectly harms a positive and resilient culture, the Leadership Bank Account gets debited.
• Maintaining credit in the leadership bank account is far more difficult than going into debit. That is, credit is accumulated via small deposits, whereas debits to the account are generally large withdrawals.

At the root of the leadership bank account is the degree of loyalty, trust, and capability (resilience) a party brings to a relationship. In a knowledge-based organisation, if managers leadership bank accounts are “in the red” (debit) with their employees, then it is likely that a prevailing culture of blame, avoidance, and selfishness is in force. Alternatively, if managers have developed an account that is “in the black” then a positive and resilient culture will flourish.

The notion of the leadership bank account can be scaled from interactions between individuals to interactions between governments and even country alliances such the European Union and OPEC.

At a practical level, what can managers do on a daily basis to ensure small credits are going into their leadership bank account rather than large withdrawls? I will attempt to provide some sort of an answer to this question in the next post.

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.