The tenth test of organisation design

The Nine Tests of Organisation Design, developed in 2002 by Michael Goold and Andrew Campbell of Ashridge Strategic Management Centre (as it was known then) is well known in organisation design circles.

In their article introducing the tests they describe them as ‘Less an intellectual triumph than a practical checklist for addressing the most important issues, our framework is grounded on some basic principles. The first and most important, the fit principle, embraces four drivers of fit – product-market strategies, corporate strategies, people and constraints. The other good design principles are the specialisation principle, the co-ordination principle, the knowledge and competence principle, the control and commitment principle, and the innovation and adaptation principle.’

And in their HBR article on the tests they say, ‘This set of tests helps you establish the right amount of hierarchy, control, and process—enough for the design to work smoothly but not so much as to dampen initiative, flexibility, and networking.’

I find the tests useful in my work and always present them in my organisation design training programmes. Earlier this year, I was working with a group and who had some questions around them – related to new technologies/approaches e.g. AI, blockchain, agile, cyber security. They wanted to know if the 9 tests were going to be updated.  I asked Andrew for his views, and he responded,

‘These technologies are no more significant or organisationally influential than the steam engine, the plough, the telephone or the computer. Yes, they have an impact, but one can use the same logic for dealing with them as for any technology.

Agile is a bit different because it is a form of matrix organisation (multifunctional skills, each with their own home functions working as a single team with lots of self-management and lots of “ways of working”). So agile is one of the matrix options: others being the two-boss matrix, the project matrix, the front back closed structure, the front back open structure, etc. Like all matrix structures it is a way of balancing “specialist cultures”, “difficult links” and “accountability”, with agile being a little more “flexible” than most other matrix solutions and a little less likely to create “redundant hierarchy’.

He went on to say, ‘This is not to say that I consider the nine tests as a finished tool. I am always looking for additional tests and better ways of expressing the existing tests. In a McKinsey version of the nine tests, they had a Cost Test: Is the design affordable and cost competitive?’

In support of Andrew’s desire to improve the tests, the handout he uses for teaching today, involves quite a bit of language change from the original, designed to make the tests relevant at any level in the organisation from a low level team to a multi-business organisation.

However, this week I’ve been pondering an additional test – the equality test. It’s front of mind because equality came up many times during my week, starting with a discussion with a lawyer colleague on the UK’s Equality Act 2010 which ‘legally protects people from discrimination in the workplace and in wider society’.

A key measure in the Act – the public sector Equality Duty – ensures that all public bodies play their part in making society fairer by tackling discrimination and providing equality of opportunity for all i.e. considering all individuals when carrying out their day-to-day work – in shaping policy, in delivering services and in relation to their own employees.

Specifically requiring:

  • eliminating discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
  • advancing equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
  • fostering good relations between persons who share a relevant protected characteristic and persons who do not share it.

Although the Equality Duty applies only to public sector bodies, the Act also states that ‘A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to these matters.

The concepts inherent in the Equality Act seems to be gaining ground in other forums. A bit later in the week I was reminded of the meeting, in August 2019, of the US Business Roundtable when ‘Breaking with decades of long-held corporate orthodoxy, the Business Roundtable (comprising nearly 200 chief executives, including the leaders of Apple, Pepsi and Walmart) issued a statement on “the purpose of a corporation,” arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.’

The New York Times commenting on this says, ‘The shift comes at a moment of increasing distress in corporate America, as big companies face mounting global discontent over income inequality, harmful products and poor working conditions.’

The NY Times reminder was followed by several other equality prods. I read in this week’s Economist’s the story that ‘Virtual reality continues to make people sick, And women more so than men’– the point being that ‘tech design bias needs fixing’.

I also read about Julian Richer, transferring 60% of his shares, in Richer Sounds, into a trust that passes the baton of ownership to the chain’s 531 employees.

And I discussed with colleagues facial recognition and cv scanning bias. We already know, as MIT researchers say, that ‘Bias can creep in at many stages of the deep-learning process, and the standard practices in computer science aren’t designed to detect it. … [AI] technologies affect people’s lives: how they can perpetuate injustice in hiring, retail, and security and may already be doing so in the criminal legal system.

Organisation designers are not immune from bias, and I wonder how much we think about our equality or equality duty (irrespective of sector) in our design work, and whether if we did, it would be a contributory factor to a well-designed organisation. When I was thinking on this, I remembered that years ago my daughter (a public sector worker) sent me a note about the three equals:

Equal treatment– e.g. a rich white man should not be given quicker access to treatment than a poor woman. This follows the principle of respect for persons.

Equal opportunity-the removal of disadvantage in competition with others e.g. a translator might be arranged for a Bengali speaker so that she can have the same opportunity as an English speaking service user to explain needs and receive information. This may require additional resources, positive action, or changes in government policy.

Equality of result– disadvantages are removed altogether- e.g. to provide care for old people in a residential home is expensive. to give the same outcome for a poor person who can’t afford to pay and a rich person who can, social services might pay for the poor person, or the state might provide free high-quality care for all to avoid stigmatization. This may require structural changes in society-challenging certain people’s rights to wealth, property and power.

I know that there are economists, philosophers, other discipline experts in the field of equality, fairness, social justice, and so on. I am not one of those. However, I wonder whether these three equals, or something like them, would form a good basis for devising an equality test for organisation design work.

Should organisation designers be interested in equality? Do we need an equality test? Let me know.

Image: A group of artist, Freddy Tsimba’s, statues made from spoons. He says he finds his inspiration in the suffering experienced by many communities in his country – DRC. Copyright: Pascal Maitre/Panos Pictures

Make change happen

I’m on week 5 (of 8) of the the FutureLearn course I’m doing, ‘Make Change Happen’.  It’s a fantastic learning programme, making the point that, ‘If we want to make lasting social and political change we must understand power dynamics, systems and influencing strategies that can shift the status quo.’  Although aimed more at social, community and development activists, most of it is equally applicable to organisational design work.

It points learners to a variety of tools and resources.  Some I already knew about and some are new to me.  Here are the ones, so far, that I’ve noted as helpful/usable for organisation designers.  (You can’t jump ahead in the course, so I don’t know what resources will be coming in the next three weeks).

Power mapping: The course leaders say that, ‘Power mapping is a tool which can help to identify who you need to influence, who you could reach out to for support, and who you could work alongside. These will be individuals or organisations with an interest or concern in your problem or issue. They may be institutional decision-makers, influential people and groups, or they may be the people who will benefit from the change’.   The course gives one template to map onto, and looking further afield I found a useful ‘how to’ guide ‘Power Mapping Your Way to Success’ with various ways, including the way given in the course, to do the mapping and a good question set to use in the process.

Campaign canvas: Inspired by the Business Model Canvas, the Campaign Canvas, from MobLab, covers 12 questions/elements, including:  How can we create the change?  What do people need to do?  What do we need to do?  It’s users say ‘By working through each element of this canvas you will ensure your bases are covered for a solid campaign.’

I quite often use the Business Model Canvas, printed out in A0 poster size, in workshops using post-it notes to fill in the thinking and discussion for each box.   I like this Campaign Canvas and I’m going to try it out in a planned change I’ve just got involved in.  (I also liked MobLab’s statement ‘We envision an equitable, peaceful and sustainable world achieved by changemakers who continually integrate the best available strategies, tactics and tools into their campaigns.’)

The change analysis tool: locates change processes in four quadrants (Boston Box style) that all influence each other.  The programme leaders say, ‘It’s a useful way to analyse an issue or problem, guiding you in what questions to ask to understand it better, to recognise if change is already happening, and steering you in how you can foster change in a number of different ways. It presents a model of how change can happen.

The top two boxes, or quadrants, deal with individual change. The top left is about change within the individual, like awareness of our rights or our own confidence.

The top right is the individual’s access to resources to make change happen. The bottom two quadrants represent changes that happen in society as a whole or within the system.

Bottom left is focused on changing people’s attitudes on issues or social norms that influence behaviour and practises more widely.

The bottom right is about changing laws and policies within formal institutions whether at local level or national and global.

All four of these quadrants are important for change to be significant and sustained. Different individuals and activist organisations will have different strength in influencing in each of the quadrants. Evidence shows that if action is taken within multiple quadrants, change will come about more quickly and be more lasting.’

The one in the programme is a simplified version of this, free/downloadable, one from Multi-Stakeholder Partnerships

Four expressions of power framework:  This was a new tool for me, and I enjoyed thinking it through and wondering when I could try it out.  It talks about 4 types of power:  Power within, power with, power to, power over.

There’s a detailed explanation of it from Powercube which says, ‘The most commonly recognized form of power, ‘power over’, has many negative associations for people, such as repression, force, coercion, discrimination, corruption, and abuse. Three alternatives – ‘power with’, ‘power to’ and ‘power within’ – offer positive ways of expressing power that create the possibility of forming more equitable relationships. By affirming people’s capacity to act creatively, they provide some basic principles for constructing empowering strategies.’

‘Power with’ has to do with finding common ground among different interests and building collective strength. Based on mutual support, solidarity and collaboration, power with multiplies individual talents and knowledge.  ‘Power to’ refers to the unique potential of every person to shape his or her life and world. When based on mutual support, it opens up the possibilities of joint action, or ‘power with’. ‘Power within’ has to do with a person’s sense of self-worth and self-knowledge; it includes an ability to recognize individual differences while respecting others. ‘Power within’ is the capacity to imagine and have hope; it affirms the common human search for dignity and fulfilment.

As well as the specific tools the course mentions other resources.  A couple I’ve browsed and bookmarked for future use are:

From Mindfulnextlinks to resources in three categories strengthening individual resilience, strengthening organisational resilience and disruptive ideas. I found myself cruising the disruptive ideas links, stopping to read ‘why a ‘not to do list’ is what most of us need’.

A clear and short (5 minutes) systems thinking video – explaining systems basics, from Oxfam.  With it is a link to a free, downloadable 24-page guide to systems thinking designed for the change and development community.

The Beautiful Rising toolbox– this is an excellent and comprehensive toolkit.  It’s well worth taking time to browse it. It’s in in five sections: stories, tactics, principles (read, Beware the Tyranny of Structurelessness), theories (Artivism captured my attention) and methodologies (in this section there’s a slightly different take on the power mapping tool.   Each of the five sections contains resources, ideas, case studies, etc.

Do you think organisation design work is a form of social/political change? Would you use these tools?  Let me know.

Image: Course outline from Futurelearn, Make Change Happen

Organisation design slogans

‘In all activities, train with slogans’, was on the card I randomly picked from my pack of Pema Chodron’s Compassion Cards.  They’re based on lojong (“mind training”) teachings from The Great Path of Awakening by the nineteenth-century Tibetan teacher Jamgön Kongtrül the Great, and, in Chodron’s words ‘are organized around seven points that contain fifty-nine pithy slogans that remind us how to awaken our hearts.’   During November I’m picking one per day to reflect on at points during the day.

This particular card, rather than heading me towards ‘awakening my heart’, pointed me towards the slogans I use when I’m talking about organisation design!  (This is similar to the findings of an interesting research article, that organisational mindfulness as a ‘popular as a stress reduction technique’, misses the tenets of the original practice.)

I wondered if I had enough slogans to make an organisation design card deck, but found not.  I do, however, use slogans.  Five that I say repeatedly in organisation design courses I facilitate, and also deploy in my own work are:

  • Follow the work: this relates to identifying the work activities necessary, in the order that makes sense, to deliver the desired outcome.
  • Fix the structure last not first: this means once you know the work activities and some of the attributes of these volume, skill level required, frequency then you can start organising in a way that enables the work to get done.
  • Roles not people: this is about thinking about the work, skill level and so on BEFORE, you start to think about the individual who is going to do it.
  • All models are wrong some models are useful: this means stay sceptical about the latest hype, Boston box, 6-points to success, etc. Use models, prescriptions and ‘benchmark data’ judiciously.
  • Think ideal not future: this suggests not trying to paint a ‘future’ but to consider the ‘ideal’ (your ‘ideal’ home is much easier to describe than your ‘future’ home – which is an unknown).

The day of the slogan card, someone who’d been on one of my courses, emailed me saying:

‘I have a question about org design to get your guidance on if I can.  How, in practice, do you separate people from positions in organisation design?

I’m working on a reorg at the moment where we have worked through the activities to get a logical structure which aligns to the department’s purpose and deliverables and are now at the stage of thinking about people to fill the jobs.

Although the principle of ‘think about the job, not the people’ is great in theory, my experience currently and from the past tells me management (and indeed HR) struggle with the implications of this, to the extent where the people considerations often inform the structure.

My current experience is working with a VP where our theory of the org design says one thing but, in the VP’s words, ‘being pragmatic, we can’t have that person reporting into them or leave this person without a job because of the repercussions’. How do you deal with this situation where the design comes up against the practicalities of what it means for people, and is it actually pragmatic or useful anyway for a client to try and separate the two?’

It’s a useful question, and one that I frequently get asked. It instantly challenges my slogans ‘follow the work’, ‘fix the structure last not first’ and ‘roles not people’.

But, it’s natural and right that leaders want to think about the people they’ve got and how they will accommodate them into any new design.   And also, that people want to think about ‘where’s my job?’

The point is not to be completely purist and ignore these responses, but to get a long way into the design – usually I suggest emerging with three options of high-level designs with their proposed structures (org chart), before you start to think about the individuals.  Q5 Partners has an excellent 3-minute video, Forget Personality, explaining the rationale for this.

Additionally, if you allow consideration of individuals who want/need roles to drive the organisation chart you’re taking a high-risk approach:

  • You may be compromising your customer/user experience by not taking a service design approach that ‘helps us to understand, improve or rethink end to end services, starting with the user’.
  • You may miss opportunities for efficiency and/or effectiveness gains if you focus on what you want to give an individual or individuals.
  • You may be accused of favoritism, unfairness or lack of transparency in why your new organisation chart is the way it is.

Organisation design involves decisions and choices that inevitably involve politics.  If we take the view that designing around an organisation’s people rather than designing around its work or its customers, is not ‘pragmatic’, as the person who emailed me said, but ‘political’ then we have a possibility of exploring the politics of the decisions and choices being put forward.

A fellow org designer believes ‘you can’t ever eliminate the people/politics part of organisation design’, and I agree with him.  Similarly, Dianne Lewis, in her old but useful 2002 article ‘The place of organizational politics in strategic change’ notes, ‘Political motives will also sometimes drive change and political tactics will always be used in some measure in the implementation of change. We therefore need to see these tactics in both positive and negative ways and not try to eliminate them altogether.’

This is good advice as all design is political.  We can’t eliminate the politics in organisation design work.  They are usually front and centre of the inevitable trade-offs, resistance to, or acceptance of,  your design options even if this is not explicitly acknowledged.  They impact the choices and decisions you make around the chosen design and the way you implement it.

Recognising that politics are inherent in organisation design choices and decisions, acknowledging this and discussing the impact and implications can be hard to do but it is better to talk about it than not to.  (Not talking about it risks derailment further down the line).

A fellow organisation designer, talking on this said, ‘it is all about trade-offs, do you put more priority on workflows and a structure that better supports strategy or one which is more inclined to be accepted by people, and has less people repercussions?  Certain scenarios will have one trump the other, and the dialogue on the politics is what it’s all about.’

Additionally, politics play significant part in the method of actually doing the organisation designing – choices around top down design, bottom up design, participative design, etc are situational and can be potentially be made with the conscious aim of shifting the political dynamics or reinforcing them.

I need another slogan – Recognise the politics:  this means accepting that we are working in a political landscape and we must keep an open questioning, reflective inquiry on it.  I don’t think we do enough of that.

What’s your view on the politics in organisation design?   Do you have a slogan on it?  What organisation design slogans to you work with?  Let me know.


Exhaustion and wholeheartedness

The Pride of Brexit’ – a sculpture by Jason deCaires Taylor is a response to  Brexit.  In his words, ‘The three wretched lions frame Brexit as an act of gross national flagellation. Situated on the shores of the English Channel, surrounded by the iconic white cliffs, they are washed up, exhausted, emaciated and dying. In London they stand as monuments to our delusions, disfigured by the toxic language of Brexit and its main protagonists.’   Regardless of your views on Brexit the exhaustion they portray is soul-piercingly tragic.

Organisations are not immune to similar societal delusions and toxicity.  The film The Corporation depicts some as psychopathic.  The film’s Economist reviewer notes that, ‘Like all psychopaths, the firm is singularly self-interested: its purpose is to create wealth for its shareholders. And, like all psychopaths, the firm is irresponsible, because it puts others at risk to satisfy its profit-maximising goal, harming employees and customers, and damaging the environment. The corporation manipulates everything. It is grandiose, always insisting that it is the best, or number one. It has no empathy.’

One of the common harms done to employees in a toxic, psychopathic organisation is burn-out.  We hear a lot about this and are warned to look for symptoms of it.  Burnout,  included in the 11th Revision of the International Classification of Diseases (ICD-11),  as an occupational phenomenon is defined as:

“A syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions:

  • feelings of energy depletion or exhaustion;
  • increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and
  • reduced professional efficacy.

Burn-out refers specifically to phenomena in the occupational context and should not be applied to describe experiences in other areas of life.”

(In many UK organisations feelings of exhaustion and burnout are probably exacerbated by the Brexit context, as one article suggests ‘Beyond the workplace, we live in an age when society itself seems to be burning out, with austerity, rising poverty and the uncertainty caused by Brexit pushing people to and beyond their limits).

The Economist reviewer of The Corporation claims that, ‘Human values and morality survive the onslaught of corporate pathology only via a carefully cultivated schizophrenia: the tobacco boss goes home, hugs his kids and feels a little less bad about spreading cancer.’

People who are in that position are clearly unable to ‘bring their whole selves to work’, a mantra that we are increasingly hearing – and one that I think has troubling aspects.  It may work in some organisational circumstances, but not in others.  A Financial Times writer expressed in a blog, on the topic, the view that, ‘It is fatuous to encourage people to behave in the office just as they do at home.’

If we are suffering from exhaustion and burn-out, and feel unable or unwilling to bring our whole self to work i.e. we do not feel in a position to express what we feel, then what?

As serendipity has it, almost the next email I opened had a quote from David Steindl-Rast,  ‘The antidote to exhaustion is wholeheartedness.’  This intrigued me and I looked it up.

It comes from poet David Whyte. He says:

‘There was a time, many years ago, working at a non-profit organization, trying to fix the world and finding the world didn’t want to be fixed as quickly as I’d like, that I found myself exhausted, stressed and finally, after one particularly hard day, at the end of my tether, I went home and saw a bottle of fine red wine I had left out on the table that morning before I left. No, I did not drink it immediately, though I was tempted, but it reminded me that I was to have a very special guest that evening. That guest was an Austrian friend, a Benedictine monk, Brother David Steindl-Rast, the nearest thing I had to a really wise person in my life at that time or at any time since. We would read German poetry together—he would translate the original text, I read the translations, all the while drinking the red wine. But I had my day on my mind, and the mind-numbing tiredness I was experiencing at work. I said suddenly, out of nowhere, almost beseechingly, “Brother David, speak to me of exhaustion. Tell me about exhaustion.” And then he said a life-changing thing. “You know,” he said, “the antidote to exhaustion is not necessarily rest.” “What is it then?” “The antidote to exhaustion is wholeheartedness.’

This story led me to look at ‘wholeheartedness’.  (defined as the state of being whole hearted, i.e. fully or completely sincere, enthusiastic, energetic).   Maria Popova, talking about Brené Brown’s TEDxHouston talk says Brown  ‘deconstructs vulnerability to reveal what she calls “wholeheartedness”: The capacity to engage in our lives with authenticity, cultivate courage and compassion, and embrace — not in that self-helpy, motivational-seminar way, but really, deeply, profoundly embrace — the imperfections of who we really are.’

Apparently Brene Brown’s ‘current research focuses on authentic leadership and wholeheartedness in families, schools, and organizations’.  (I hope this research does not go the way of ‘resilience’, ‘happiness’, and ‘mindfulness’ to be monetized by consultants).

As I was thinking about wholeheartedness, someone sent me a link to a National Geographic piece ‘If Birds Left Tracks in the Sky, They’d Look Like This’, telling the story, and showing the photos,  of ‘Barcelona-based photographer Xavi Bou’ who hasspent the past five years trying to capture the elusive contours drawn by birds in motion, or, as he says, “to make visible the invisible.” …  He calls the project “Ornitografías,” This current work, he says, combines his passion and his profession. “It’s technical, challenging, artistic, and natural. It’s the connection between photography and nature that I was looking for.’

Years ago I read a book Shop Class as Soulcraft . The author, Matthew B Crawford, has a PhD in political philosophy and, at the time of writing the book, owned and operated an independent motorcycle repair shop.  His descriptions of this work with all its frustrations, problems and joys are a delight to read’ .  (Read the piece that the book grew out of here)

The stories of Bou and Crawford both illustrate for me wholeheartedness in action.

Now I’m mulling over if and how you can move from exhaustion to wholeheartedness either individually or collectively.

For individuals feeling exhausted and burned out, are the feelings situational and there are other places in their lives where they can be wholehearted?  If yes, does the wholeheartedness they feel in one dimension help manage the exhaustion in another, or is exhaustion all consuming?

If their exhaustion is a symptom of burnout brought about by organisational conditions then is there something designers can do to change the organisational conditions?  Can organisations change from creating burnout to developing wholeheartedness and,  if so, what would it take?  I don’t know, but some possibilities might be:

What’s your view/experience of exhaustion and wholeheartedness?  Do/would design strategies help exhaustion move to wholeheartedness?  Let me know.

Innovation and path dependence

One of the sessions I went to at the European Organisation Design Forum conference, on Saturday, was led by Elise Kissling. She ’s described in the conference info as ‘passionate about creating learning teams and organisations that deliver radical innovation’.  At the point she wrote this she was at chemical company BASF.  Five weeks ago, she left to start up SkyNative to execute an innovative method of bringing daylight into rooms that don’t have windows.

The session was was still about BASF but less about the program and learning platform program she designed and launched ‘for market driven innovation’ and more about the difficulties of getting innovations adopted and into the mainstream of the organisation.  She spoke bluntly and bravely on this.  She began with the definition that she likes of innovation which comes from the Cambridge Dictionary  Innovation:  a new idea or method, or the use of new ideas and methods.   It was getting the innovations into use that caused her, finally, to move on and have a go herself with SkyNative

BASF barriers to innovation implementation that she mentioned were:  inability to find the leader(s) who would decide to implement or take on the innovation, sudden strategy changes,  turf wars (‘don’t touch my EBIT’), ‘this idea is too far from the business’, ‘these are just little ideas that don’t fit together’, ‘implementation is too complex’.

Kissling noted that these types of barriers contributed to a high failure rate in their innovation work.   Her statement is echoed in an HBR article, the authors say ‘To catalyze innovation, companies have invested billions in internal venture capital, incubators, accelerators, and field trips to Silicon Valley. Yet according to a McKinsey survey, 94% of executives are dissatisfied with their firms’ innovation performance.’   (Unfortunately, there is no link to the quoted McKinsey survey, and I can’t find the survey that has it.  Does anyone have the link?)

Listening to the talk,  the concept of path dependence crossed my mind.  It’s a concept that I don’t think we give enough thought to in organisation design work, and especially when we use words like ‘transformation’, or ‘agile’.

In An Essay on The Existence and Causes of Path Dependence (2005), the author, Scott E Page, discusses it.  He tells us that, ‘Path dependence in its loosest sense means that current and future states, actions, or decisions depend upon the path of previous states, actions, or decisions’.   He then explains (in mathematical detail) ‘within a dynamical systems framework’,  what this means ‘using two broad classes of models.

He says, ‘I base the first on dynamical systems and the second on choice theory. These models help to reveal the causes of path dependence. The proximate cause of history mattering differs in the two classes of models. In the first, history has force. The past exerts sway over the present. A decision to prohibit women from voting effects how women see themselves in relation to men. When, given the vote, women cannot escape all effects of their past denial of rights. In the second, the cause is more direct. A decision to provide social security for the aged lowers the economic and political costs to extending those benefits to orphans and the infirm. When written in the dark lead of mathematics, the line between forces and externalities appears crisp, but that is not so. Cognitive attachments are externalities in our heads, …  and externalities between choices change the incentives for making subsequent choices. Changes in incentives can be equivalent to changes in force.’

I interpret this, from an organisation design perspective, to mean that older organisations are only able to transform, or innovate as far as their history allows.  McKinsey make a telling point, that seems to support this notion, ‘It’s no secret: innovation is difficult for well-established companies. By and large, they are better executors than innovators, and most succeed less through game-changing creativity than by optimizing their existing businesses’.

In a later paper  (2016) that considers path dependency and game theory Scott E Page argues ‘that institutional performance is path dependent, and that patterns of behavior—culture—drive this path dependence.’ It’s a dense, mathematical paper, drawing on game theory.  One of the classes of games he discusses is ‘Coordination Games: In coordination games individuals choose one of two actions: to follow tradition or to innovate’.  In these games, highest payoffs are achieved when players manage to play the same action as their opponent. These games can capture technological choice as well as coordination on social norms or language, or situations in which societies fail to adopt an innovation for cultural reasons, such as the United States continued use of the English system of weights and measures.’

As Kissling was speaking, I looked up BASF to find out when it was established – April 1865.  So, a lot of history!  (You can see annual reports from then to now here), assuming the theory around path dependency is applicable to organisations – and it looks that way to me – it may be at least a partial explanation of why innovation appears to be difficult in BASF as well as in other well-established organisations.  They are governed/constrained, among other things, by their past choices and decisions.

If this is the case, are large organisations never going to truly transform or innovate?   It depends.  Authors, Sydow, Schreyogg, and Koch, of another paper Organizational Path Dependence: Opening The Black Box, explains organisational path dependence as a process that (1) is triggered by a critical event leading to a critical juncture; (2) is governed by a regime of positive, self-reinforcing feedback constituting a specific pattern of social practices, which gains more and more predominance against alternatives; and (3) leads, at least potentially, into an organizational lock-in, understood as a corridor of limited scope of action that is strategically inefficient.

Kissling’s method of breaking out of BASF’s organisational lock-in has been to leave, and attempt innovation in a new (start-up) organisation.  But is there a way that BASF’s path could be changed? The framework of path dependence, offered by Sydow, Schreyogg, and Koch, ’offers insights into the possibilities and limitations of breaking out of organizational path dependence. In particular, path breaking requires a thorough understanding of the social mechanisms driving the path process. Understanding these mechanisms, in turn, provides a platform for developing path-breaking interventions.’

Haier, established 1984, is a good example of an organisation that has used path-breaking interventions to stay innovative.  The company is one of two – the other is Cemex – analysed in the book Energy and Innovation: Structural Change, which notes that ‘the concept of path dependency is critical when analyzing the rise of innovative organizations in emerging economies, as most of them are locked-in at stages that lack innovation capabilities’.  Haier and Cemex are ‘two companies in emerging economies that broke out from this path dependency to create strong innovation capabilities, catching up with global leaders in their industries’.

From what I heard about BASF – it is showing little sign of breaking out of path dependency.  I wish Kissling well in her new venture, and recommend – if she hasn’t already – that she investigate path dependency to avoid lock-in as she designs her new organisation.

Do you think learning about path dependency would be useful for organisation designers?  Let me know.

The Dangers of Categorical Thinking

‘Your mind is a categorization machine, busy all the time taking in voluminous amounts of messy data and then simplifying and structuring it so that you can make sense of the world.’    I stopped to think about this sentence in an article I was reading in the current issue of the Harvard Business Review – The Dangers of Categorical Thinking, by  Bart de Langhe and Philip Fernbach .

The reason I stopped on the sentence was because I’ve often thought that the categories and categorisation tools/models/frameworks we use in organisations and organisation design make nonsense of the world rather than sense of the world.   I started to list some of the one I’ve come to consider more nonsensical in the course of my working life:

  1. 9-box grids
  2. Myers Briggs (and several other similar inventories).
  3. McKinsey 7-S model  (and other organisational systems models, including the Galbraith Star Model )
  4. Various 4 x 4 matrices e.g. Boston Box, Eisenhower matrix,
  5. Competency models of various types.
  6. RACI charts that attempt to categorise who should be responsible, accountable, consulted with, or informed about something.
  7. Phase or step models of change, design, development e.g. Kurt Lewin’s unfreezing, changing and refreezing, appreciative inquiry, design thinking (emphasise, define, ideate, prototype, test)
  8. Maslow’s hierarchy of needs
  9. Grading systems that often with learning/development. (‘You can’t take that training because it’s not for your grade’).
  10. Typologies

Thinking more about these, for most of the above methods of categorising stuff I’ve initially found them useful – they simplify things, but I’ve found there are too many instances when they don’t seem valid.  In using them and with more experience I’ve relegated them to the ‘nonsense’ pile, because organisational life is not simple.  Trying to categorise, say the ‘competence’ of someone or categorise aspects of  ‘style’ (McKinsey 7-S model),  imposes unhelpful, artificial boundaries that can hamper considered ‘design’.

As the HBR authors say, ‘For a categorization to have value, two things must be true: First, it must be valid. …  Second, it must be useful.’   They rightly say ‘In business we often create and rely on categories that are invalid, not useful, or both—and this can lead to major errors in decision making.’    Looking at my list above they’ve mostly reached the nonsense pile because I no longer see validity and/or use in them.

A FutureLearn course I’ve just started (Make Change Happen ) tells learners that ‘ we see the world through our personal experience and beliefs. And we make assumptions all the time based on those beliefs.’

The educators view is that, ‘we must recognise our own power, influence, attitudes, and behaviours.  We must have a good awareness of self. This includes an awareness of who we are, what drives our thinking, our power, prejudices, and values, and understanding what privileges we have or don’t have relative to others. It includes an awareness of the role our different identities, such as gender, race, class, age, disability, and sexuality have on our attitudes and behaviours and those of others. None of us are ever really objective. What we see and what we do is dependent on who we are, our background, personal experiences, social stereotypes, and cultural context.’

When we categorise stuff we are doing so from within the frame of those dependencies.   There’s delightful evidence of this in writings about ‘wunderkammern’ or cabinets of curiosities, that started to emerge in mid-sixteenth century Europe.  They were collections—combining specimens, diagrams, and illustrations from many disciplines and the way they were categorised was ‘a contradiction’ and a reflection of certain assumptions and cultures:

While wunderkammern marked an encyclopaedic and objective approach to nature, the wonder and curiosity that they inspired also preserved a sense of mysticism that mirrored religious beliefs. An excellent example of this contradiction lies in the collector’s treatment of an object such as a piece of coral. How should this curious thing be defined and categorized? Because few people were familiar with coral in its natural environment, they invented definitions based on their personal ideologies. Therefore, the question of how to define coral could be approached from a medical, superstitious, scientific, or purely aesthetic point of view. Some used coral as a treatment for anaemia; others kept it as a talisman against being struck down by lightning, or the evil eye; naturalists debated whether to classify it as mineral or animal; and finally, those with an eye for aesthetics simply arranged it based on its brilliant red hue. Clearly, there was no one correct way to execute a cabinet of curiosities; the personal level of choice involved in collecting was representative of the range in scientific and religious values at this time.’

Today’s categorisation of coral is also not clear-cut either:  we find that ‘Scientists generally divide coral reefs into four classes: fringing reefs, barrier reefs, atolls, and patch reefs’ also, ‘The three main types of coral reefs are fringing, barrier, and atoll.’ And in an interesting article on mapping coral, ‘Dead coral (DC) is listed as an additional category instead of being categorized as rock. ‘

Coral categories serve as an illustration of the dangers of categorising.  As the HBR authors say ‘Categories lead to a fixed worldview. They give us a sense that this is how things are, rather than how someone decided to organize the world. John Maynard Keynes articulated the point beautifully. “The difficulty lies, not in the new ideas,” he wrote, “but in escaping from the old ones.”’

The HBR authors suggest categorising ‘can lead you to compress the members of a category, treating them as if they were more alike than they are; amplify differences between members of different categories; discriminate, favoring certain categories over others; and fossilize, treating the categorical structure you’ve imposed as if it were static.’  (I ask myself if these four dangers of categorising are, themselves, categories?)

They offer four ways of avoiding the dangers.  The most interesting of these is to ‘schedule regular “defossilization” meetings’; ‘holding regular events in ‘which you scrutinize your most basic beliefs about what is happening in your industry. Is your model of the customer landscape still relevant? Are customer needs and desires changing?’   This could work if we avoided categorising the people who should attend these events.   A random selection would (probably) work better than selected invitees – see Matthew Syed’s new book Rebel Ideas: the Power of Diverse Thinking on this.

The HBR article concludes: ‘Categories are how we make sense of the world and communicate our ideas to others. But we are such categorization machines that we often see categories where none exist. That warps our view of the world, and our decision making suffers. In the old days, businesses might have been able to get by despite these errors. But today, as the data revolution progresses, a key to success will be learning to mitigate the consequences of categorical thinking.’

What categorical thinking are organisation designers subject to?  How do we mitigate any negative consequences of this?  Let me know.

Image: Coral ID

Zoom from ignorance to omniscience

‘His qualifications for writing The Body are even, fewer, but because he knew almost nothing about his subject, he had to explain everything from first principles, as much to himself as to his readers.  It is this that makes Bryson … a hero to all feature writers.   Our job is to zoom from ignorance to omniscience, but we can aspire to do so with only a fraction of Bryson’s clarity, readability and humour.’  (Andrew Billen, reviewing Bill Bryson’s new book The Body).

I read this review yesterday, having just come back from an organisation design workshop I was facilitating, where someone told the story of engaging expensive consultants to come into the organisation to develop a new design for one of the business units.  After almost 6 months of work the consultants, who’d worked with the internal consulting team, presented their proposals to the Director who said ‘that’s good work, but I think we’ll do it this way instead’.  Apparently, he’d seized the existing organisation chart and just re-drawn the lines and boxes in a slightly different configuration.

This bore no relation to the consultants’ proposals, nor acknowledged the work that had gone into involving staff/stakeholders in developing a design where the organisation chart was one outcome of a careful and reflective assessment of what was needed to resolve the issues.

Nevertheless, positional power ruled, and people started to get an implementation plan together for the leader’s ‘design’.  3 months later he’d left the organisation and his new org chart, along with the expensive consultants’ reflective design was no more.  The issues remained along with the de-motivation that the leader had generated.

This story came after the conversation I’d had earlier in the week with an internal consultant from one of the biggest, global tech companies.  He’d been talking about the difficulty of getting sensible, worked through, collaborative proposals for improvement through the power system.  Expertise and involvement gave way to individual positional power and similar ‘we’ll do it this way instead’ in the stories he told.

These stories of power trumping expertise are both familiar and dispiriting and I think it’s a more common experience for internal consultants than for external ones.  Indeed, one member of the workshop I mentioned earlier, told a story of someone who’d left the organisation because she felt her expertise wasn’t valued.  She’d joined a major consultancy and returned to the same organisation and experienced a quite different reception now she had the badge of external credibility.

In Flawless Consulting, Peter Block discusses the ‘important differences between internal and external consultants’.  In his view ‘The difficulty of being a prophet in your own land is overplayed and can be used as a defence, but there is some truth in it.’

I don’t think it is over-played.  My observation and experiences are that expertise is under-valued compared with positional power and I’m beginning to wonder whether the leaders in most organisations zoom from ignorance on matters of organisation design towards obtuseness and heel-digging, rather than to omniscience.  (Please tell me I am wrong).

In fact, I asked an internal consultant turned external consultant, whether he thought ‘organisation design as a ‘discipline’ has had its day?  Someone asked me a few weeks ago, whether I thought it had and I’ve been thinking on it.   What’s your view?’  His response was: ‘I think organisation design still has legs. We are doing a lot to join up design with the other aspects of transformation to develop good people-centred approaches to transformation. I think there is more demand than ever for that kind of work. My view was always that org design projects need to pay attention to the cultural, leadership and change impacts from day one. Buyers in the market seem to be appreciating that more. So, the good org design people will stay busy, but the mechanistic approaches will hopefully die off.  I still see too many examples of poor design causing problems, or poor design process causing problems. The design skill set still needs investment’.

However, maybe I’m predisposed to focus on the negative things in this case. Because my feeling, that organisation design expertise is under/not valued, was endorsed when another member of the group I was working with asked me how you could short-cut the ground-work of organisation design (finding out what’s going on in the context, whether what’s presenting as a problem is the real problem, whether organisation design is the issue and not something else, etc).

She asked because she was working with a leader who thought doing this kind of work was a waste of time and they should ‘just get on with the re-structure’ i.e. changing the lines and box configuration on the organisation chart.

What is it about an organisation chart that leaders tend to seize on and alter and think they are ‘designing’, without reference to any knock-on effects on work-flow, information flows, system, processes and interdependencies?  And without any expertise in organisation design methods and practices?

Searching for an answer to my question – is expertise under/de-valued? I remembered the infamous quote from UK politician Michael Gove. He ‘refused to name any economists who back Britain’s exit from the European Union, saying that “people in this country have had enough of experts”.’

I then came across a book review of The Death of Expertise, by Tom Nichols.  The reviewer, Rod Lamberts, Deputy Director, Australian National Centre for Public Awareness of Science, says that ‘Nichols’ focus is on the US, but the parallels with similar nations are myriad. He expresses a deep concern that “the average American” has base knowledge so low it has crashed through the floor of “uninformed”, passed “misinformed” on the way down, and is now plummeting to “aggressively wrong”. And this is playing out against a backdrop in which people don’t just believe “dumb things”, but actively resist any new information that might threaten these beliefs.’  Having read the review, I instantly bought the book.

Maybe what I’m observing is part of a societal trend away from valuing expertise. Ola Rosling,co-author of Factfulness and president of the foundation Gapminder,  ‘is dedicated to exposing common misconceptions about the world and promoting a fact-based viewpoint’. He says that ‘we need to realise that we are ignorant about our ignorance.’  But that is easier said than done.

Herrero Leander makes a point that ‘we are all traders of comfort’, saying ‘Each of us carves out the world around by areas of comfort. Within that area, ‘our certainty’ is high.’   He asserts that ‘The financial analyst, the trader, and the risk manager think that what they do is something concrete, evidence driven and not that complicated. The HR specialist, the psychotherapist and the designer would not touch those areas and declare them opaque and unintelligible.’ His view is that we seek comfort.

On this argument, it may be that leaders are uncomfortable with the way organisation designers do their work and we should make efforts to help them feel comfortable about it.  This somewhat echoes Nichol’s view (as reported by the reviewer) that experts should:

  • Strive to be more humble.
  • Vary their information sources, especially where politics is concerned, and not fall into the same echo chamber that many others inhabit.
  • Be less cynical. Here he counsels against assuming people are intentionally lying, misleading or wilfully trying to cause harm
  • Be more discriminating – to check sources scrupulously for veracity and for political motivations.

Do you think organisation designers’ expertise is undervalued?  Could we do more to help our clients zoom from ignorance to omniscience?  Let me know.

Image: Achala, Destroyer of Ignorance, with Consort, 1522-50, Nepal – New York Metropolitan Museum Of Art